Most favicons (like cnn.com for example) have a solid white border, which looks fine in the urlbar page proxy, but stands out in the toolbar or a tab. They should be made transparent.

There are perfectly simple and fairly well documented ways for a site to have a transparent favicon. The simplest being use the <link rel="icon" href="icon.png" type="image/png" /> and then using a PNG image could give them a favicon with alpha transparency, similarly using GIF files they could get simple transparency. Even using the \favicon.ico in the default Windows icon format has a simple transparency feature which is used by some sites, eg see http://www.userfriendly.org/ for an example. Any site that has an icon with a non-transparent background has made a choice that that is how their logo should look, and we ought to respect that.

Agree with comment 1 ... although I can't imagine a situation where making a white outline transparent would be bad.

Such a situation (where making a white outline transparent is inappropriate) is easy to imagine. For example, when the above discussed toolbar is light gray (it's true for Pinball skin and some other ones), then some gray text or small gray logo, which looks quite O.K. on solid white background, nevertheless quickly becomes unintelligible on those shades of gray native to the toolbar. This bug would better be wontfixed.

I side with wontfix we'd be saving one bad presentation, but creating others... especially if there isn't an easy way to mask just the outer white.. consider something like the washingtonpost.com icon if you mased the "outer" white and it was sittting on the grey of a background tab.

Yup, too hard to do right.