Serving favicon.ico in ASP.NET MVC
I agree with the answer from Chris, but seeing this is a specific ASP.NET MVC question it would be better to use either Razor syntax:
<link rel="icon" href="@Url.Content("~/content/favicon.ico")"/>
Or traditionally
<link rel="icon" href="<%= Url.Content("~/content/favicon.ico") %>"/>
rather than
<link rel="icon" href="http://www.mydomain.com/content/favicon.ico"/>
Placing favicon.ico in the root of your domain only really affects IE5, IIRC. For more modern browsers you should be able to include a link tag to point to another directory:
<link rel="SHORTCUT ICON" href="http://www.mydomain.com/content/favicon.ico"/>
You can also use non-ico files for browsers other than IE, for which I'd maybe use the following conditional statement to serve a PNG to FF,etc, and an ICO to IE:
<link rel="icon" type="image/png" href="http://www.mydomain.com/content/favicon.png" />
<!--[if IE]>
<link rel="shortcut icon" href="http://www.mydomain.com/content/favicon.ico" type="image/vnd.microsoft.icon" />
<![endif]-->
1) You can put your favicon where you want and add this tag to your page head
<link rel="shortcut icon" href="images/favicon.ico" type="image/x-icon" />
although some browsers will try to get the favicon from /favicon.ico by default, so you should use the IgnoreRoute.
2) If a browser makes a request for the favicon in another directory it will get a 404 error wich is fine and if you have the link tag in answer 1 in your master page the browser will get the favicon you want.