Blogger disabled custom favicons
The blogger or google's blogspot have blocked using the custom favicon's within blogs.
Before blogspot bloggers had been able to add custom favicons to their blogs.
So whenever a blog site loads to the browser visitor had been able to view the favicon (a small icon appeared on the left corner of the web browser's address bar) within the address bar of the browser.
A web site owner can add favicons or shortcut icons to their web sites or blogs using the following code:
<link href='http://sri.890m.com/wickum/h.gif' rel='shortcut icon'/>
But you can not seen such favicons anymore as google disabled the use of them within blogs.
Instead they replaced the blogger classic icon again.
We actually don't know why they insist bloggers to use classic shortcut icon in blogs.
But it can be seen as a improve of promotional works.
Update:*****************************************************************
You can still enable your custom favicon in blogger.
By Moving your icon between:
]]></b:skin>
<link href='http://path to icon' rel='shortcut icon'/>
<link href='http://path to icon' rel='icon'/>
</head>
Done.
Favicons will work just same as before .
Happy Blogging
Examples of adding Favicons to blogger or a web site :
<link href='http://path to icon' rel='shortcut icon'/>
<link href='http://path to icon' rel='icon'/>
You can use the both styles in once.

