I first came across Faviconize through Seth Rosenblatt's CNET story highlighting 12 "must-have" Firefox extensions. My life has not been the same since.
Faviconize won't wash your socks or balance your checkbook. No, it does something much more basic: It frees up space in your tab list.
There are three sites that I spend a lot of time on: Zimbra (email), SugarCRM (CRM), and CNET (er, blogging). So, I've created three permanent places for them on my tab list. You can see them to the left of my open tabs. The rest come and go: These three stay, but they stay in a very unobtrusive fashion, taking up very little space.
Once installed, Faviconize allows you to right-click on any open tab to turn it into a favicon. It's simple, powerful, and something you should install right now.
(You're using Internet Explorer, you say? I'm sorry. You'll have to rely on Microsoft to come up with equivalent technology for IE because, you see, it has a very limited community for IE to help with development. Better use an open-source browser next time.)