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Tried pasting it in, but doesn't recognise the .icns format. Just gives me a preview app thumbnail.

EDIT: Opened in preview, tried saving the icon as a PNG and GIF, but it won't recognise that either???
 
Just worked it out. Saved as a GIF, put into CandyBar, right-clicked icon, copied icon and mask, pasted in. Worked perfectly.
 
Preview can do this too. In Preview just use the Copy method from its menubar. It's under the Edit menu. After you have copied the icns file go to the folder that needs this icns file and highlight the little thumbnail up in the corner of the Get Info window. Now use Command-V - Image should be applied and you get all the sizes too from 512px to 16px without distortion.
 
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