>>Well, Doug, I'm limited to guesses here. What I did was get the first image as the 256 color 32x32. I then copied it into the clipboard, when to the ImageEditor and shrank it to 16x16. I assume that this also transformed it into a 16 color bitmap. I copied that into the clipboard, went back to VC++ and pasted it as the second icon. Could the problem be that the first image in your case is the 16x16?
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>Nope. Right now the first image is the 256 color 32x32 image. I'm baffled.

I gotta admit that I am too. I just checked the image in C++ and it's as I described before. The icon for the executable in the Explorer (Win98SE) is right, and the shortcut on the desktop is right.