The favicon.ico has always been a mystery as to know how IE negotiates with that. No matter if you put it in the root or as a reference in the HTML, IE has a lot of problems detecting a new version.
As opposed to images, where a manual refresh will pull out the latest version, the way that file is handled by IE is very weird. It may take weeks before it sees the new version. Even if we clear the cache, it still comes back as the old version instead of the new one. There is some kind of additional cache IE negotiates with and it seems to keep an old reference from it somewhere. I do not have that problem with Firefox and Chrome. Anyone has info on that?