Icon basics, and understanding icon tutorials:

An icon (or avatar) is usually sized at 100x100 pixels.  Icons have a huge range of purposes, including forum display pics,  MSN userpics, Livejournal userpics, as well for assorted usages that can be used on a website.

The basic tools and effects which icon makers can use, are:  The Crop Tool , the Floodfill tool ,  and the Sharpen Filter.
The ways these tools are used is really all up to the icon maker.  If they want a far away look at the photo, or a close one.

Using the crop tool is simple enough. You click and drag your mouse over the area in which you would like to crop.

Using the Floodfill tool is slightly more challenging.  Select your Floodfill icon, and below your taskbar will appear a bar that allows you to select different options.
Encased in the red lines in this view (for PS7) is the most important part. (Click to make image larger)

The Mode and the Opacity.   By clicking the drop down menu for Mode, it will give you a selection of blending options.
The Opacity allows you to choose the intensity of the coloring effect.

Finding the Sharpen filter will vary by what program you are using.  Most likely, you will find your sharpen filter under the Filters (for PS7), or Effects (for PSP8)