this is not an icon but the effect can be used for icons so i hope this is ok
this is a tut for faux vectors done in psp 7

IMAGE HEAVY DIAL-UP BEWARE



using many different techniques with this picture
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the first technique is the Optimized Median Cut

first you want to copy the picture and paste it as a new image for later use

then you go to Colors>Decrease Color Depth>16 Colors(4 bit)like this
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choose Optimized Median cut and Nearest color like this
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your picture should now look like this
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next go to Colors>Increase Color Depth>16 Million Colors(24 bit) like this
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after you do this your colors should look like this
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next you will click the Edge Preserving Smooth button like this
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or you can go to Effects>Noise>Edge Preserving Smooth

and the box will look like this.i set the smoothing to 8 but you can play around with it to how you like it
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next you will go to the duplicate image that saved,copy and paste it as a new layer.

then set the layer to Color like this
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you can change the blend modes to screen or overlay,but i like to use color.you image should now look like this
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and then you can merge all layers and your done

the second technique is the Optimized Octree
just about the same as the last techinique but with a differnt end result.

you will do the same first two steps as the last,copying the image,decreasing the colors to 16 colors.but this time you will click Optimized Octree,Nearest Color like this
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your image will now look like this
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do the same as before,increasing the color to 24million colors,and then edge preserving

smooth,then copy you saved image and paste as a new layer and set the blend mode to color and the

finished image will look like this
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the next technique is again the same with different outcome.this one is the Windows technique

same steps as before,when you get to decreasing the colors,this time you will check Windows,Nearest Color like this
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and you get this
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again next you will do the same steps as before,increasing the color to 24million colors,and then

edge preserving smooth,then copy you saved image and paste as a new layer and set the blend mode

to color and the finished image will look like this
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the next technique is different from the last three and this is the Posterize method.

start with your image.go to
Colors>Posterize and set it to 6 like this
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your image now looks like this.you can leave the image like this,maybe just add some smoothing.but i prefer to go on
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next you follow the same steps in the last tuts.Edge Preserving Smooth set to 8,paste copied image as a new layer and set to color and you should get this
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and the last technique is the New Adjustment Layer technique.
start with you image.this time we will go to Edge Preserving Smooth first and set it to 10 instead of 8 like this

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you image now looks like this
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next go to
layers>New Adjustment Layer like this
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set the layer to 14 like this
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next you want to go to the layer palette and click on the original image layer like this
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Duplicate the layer
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and move the duplicate layer to the top making sure it is the active layer
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set the blend mode to color and you end up with this
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each technique comes out slighty differerent.here is a look at each of the techniques used along with the original image
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hopefully this was helpful and understandable