Faction icon

im not very good at finding what i need on forums, im sure this has been asked a million times before but ima just ask again.

so about the icon:

does it have to be 16*16 pixels or can it be smaller?

does the file have to be .tga or .bmp?

the npc also says it has to be called 16*16.tga but the * icon cannot be used in file names how does one get that done?

i think thats all i need to know for now, thank you for your help.