Let's make sure you are doing the right thing to change a program's icon (or the icon of any other folder or file, for that matter).
1. Get the icon you want into the clipboard. One simple way to do this is to open the icon file in the Preview application and select menu choice Edit -> Copy (or command-C).
The picture can be in any of several picture file formats. It does not have to be an "icon" file.
2. In the Finder, select the application, folder, or file whose icon you want to change.
3. Select menu choice File -> Get Info (or press command-I) to open its Info Window.
4. Click on the icon at the top left of this window, to select it.
5. Select menu choice Edit -> Paste (or command-V). The icon should change.
6. Close the Get Info window.