In your opinion is it still necessary to produce 16 and 256 color icons? I ask this because I haven't seen a computer in the last 10 years that can't display in 24 bit color. Occasionally I have faced old Win98SE systems but even they display in full color invariably they want to upgrade which in their case means buy a new discount system.)
In reading your articles it appears that Vista doesn't use 24x24 icons, is this so? At the same time I maintain several computers for elderly people on which I change the DPI to 120 for readability. Now with giant wide screens I find it necessary to do this for many users, one is so fine I have windows running at 144 DPI, e.g. 150%. The resulting blown up icons don't look as nice, is there any way to mitigate this. For reference I am thinking the messy ones are 256 color and sticking with full color and an alpha channel is better.
PS I clued in the person I make Icons for to your program, I supply him with the individual graphics in numerous variations, he picks the ones he likes but is using an antiquated shareware to package them into ico files.
I would not say it is necessary, but I would still recommend it. There are still situations, when the 256 or 16-colors icons are used. Running in less than 24 bit color is indeed scarce, but it sometimes happens when graphics adapter drivers are not functioning properly. A more important scenario is a remote desktop session, which usually runs in lower color depth. Also, Windows 2000 and earlier systems cannot properly use icons with alpha channel.
Since generating the pre-XP formats is one-click action and the space requirements are relatively low, I would stick with them.
Vista may use 24x24 icons if it happens to need them (maybe in Start menu, just as XP; or when running at 144 DPI - the small icons in Explorer are 24x24).
At higher resolutions, the icons in Vista are sometimes messy. I do not know exactly why, but it seems to sometimes cache the lower-res versions and not refreshes it after switching to higher resolution. Also, I believe that some updates did change the way the icons are handled in Vista. When running at 120 DPI I saw Vista switching desktop icon size from 48x48 to 60x60 and back without any action on my side. Weird. Also the desktop shortcuts created by installer look ugly and when I create a shortcut manually it is smooth. Experimentation is what delivers results in Vista (until the next update, it is a work in progress ;-)), I have not figured it out yet. Having the hi-res image in an icon and praying is a good strategy.
Find out how Vista icons differ from XP icons.
See how RealWorld Icon Editor handles Vista icons.