Full icon tutorial (Picture It 2002): Naima
How to go from
to 
Image heavy, looks more complicated than it is.
Original image: Naima
This is how your project will look in the end:

Start off with a 100x100 base.
Open your image and drag it to the base. Move and resize till you're happy:

Now we're gonna make a number of cutouts: go to Crop or trim -> Create a cutout. Use the Cookie cutter shape.
First I made a rectangular cutout down the length of the icon, then another one down the width. Make sure your cutouts extend well beyond the icon. This will be important later on for the soft edge effect. Choose to leave your cutouts in the original project.
Since the original image doesn't extend far enough on the right hand side and on the bottom side of the icon, I had to manually extend the cutouts. So I made two extra small cutouts on the edge of the cutouts I just made and moved them beyond those cutouts (I hope this makes sense).
Now group all your cutouts (4 at this point) together. (Hold down the Ctrl key while selecting your objects from the object stack. Then click on the 'lock' icon in your project field, or use 'Group' from the menu):

Once you've grouped your cutouts, select them and go to Photo Effects -> Photo Effects -> Emphasize. Choose Silver:

Select your cutouts. Go to Photo Effect -> Frame and edge effects -> Soft edges. I set mine to 23. Now you see why it's important to have your cutout extend beyond the icon, so the 'soft edge' doesn't effect the outer edge of the icon, but only inside the icon (still hoping this makes sense):

Now for the border…
Add a square (add shape -> shape -> square), fill with black. Go to Crop or trim -> Trim cutout/cut a hole. Use the Cookie cutter shape to cut out a smaller square, so you're left with a border. Move and resize till you've got a 2 pixel border:

You might wonder why I didn't just add a square and chose No fill, instead of this roundabout way of making a border. This is because now I can do the following:
Go to Photo effects -> Color or texture -> Fill with color or texture. Choose picture. Fill your border with your original image:

(Technically, you could have made this border as a cutout from the original image, but this way it's much easier to get the positioning right)
We end with some text. I used Evanescent pt14 (from dafont.com). Select the text, go to Photo Effect -> Frame and edge effects -> Soft edges. I set mine to 3:

Voila
to 
Image heavy, looks more complicated than it is.
Original image: Naima
This is how your project will look in the end:

Start off with a 100x100 base.
Open your image and drag it to the base. Move and resize till you're happy:

Now we're gonna make a number of cutouts: go to Crop or trim -> Create a cutout. Use the Cookie cutter shape.
First I made a rectangular cutout down the length of the icon, then another one down the width. Make sure your cutouts extend well beyond the icon. This will be important later on for the soft edge effect. Choose to leave your cutouts in the original project.
Since the original image doesn't extend far enough on the right hand side and on the bottom side of the icon, I had to manually extend the cutouts. So I made two extra small cutouts on the edge of the cutouts I just made and moved them beyond those cutouts (I hope this makes sense).
Now group all your cutouts (4 at this point) together. (Hold down the Ctrl key while selecting your objects from the object stack. Then click on the 'lock' icon in your project field, or use 'Group' from the menu):

Once you've grouped your cutouts, select them and go to Photo Effects -> Photo Effects -> Emphasize. Choose Silver:

Select your cutouts. Go to Photo Effect -> Frame and edge effects -> Soft edges. I set mine to 23. Now you see why it's important to have your cutout extend beyond the icon, so the 'soft edge' doesn't effect the outer edge of the icon, but only inside the icon (still hoping this makes sense):

Now for the border…
Add a square (add shape -> shape -> square), fill with black. Go to Crop or trim -> Trim cutout/cut a hole. Use the Cookie cutter shape to cut out a smaller square, so you're left with a border. Move and resize till you've got a 2 pixel border:

You might wonder why I didn't just add a square and chose No fill, instead of this roundabout way of making a border. This is because now I can do the following:
Go to Photo effects -> Color or texture -> Fill with color or texture. Choose picture. Fill your border with your original image:

(Technically, you could have made this border as a cutout from the original image, but this way it's much easier to get the positioning right)
We end with some text. I used Evanescent pt14 (from dafont.com). Select the text, go to Photo Effect -> Frame and edge effects -> Soft edges. I set mine to 3:

Voila
