We also use animated favicon. for supported browsers.
We created an animated gif at 50px x 50 px
Then use the code as such ( to display static or animated dependant on browser compatibility.
Code:
<link rel="shortcut icon" href="http://www.yourforum.com/forum/favicon.ico"/> <link rel="icon" href="http://www.yourforum.com/forum/animated_favicon1.gif" type="image/gif"/>