The problem isn't that Safari doesn't respect the favicon shortcut, but that Safari saves all the favorite icons in an internal database and once it's visited a site and stored its icon, Safari has no way of knowing that the icon's changed.

To convince Safari to play nice, you need to actually go into the icon cache and remove the icons stored for your Web site. Unfortunately, this is incredibly hard to accomplish. Further, using "Clear Cache" or any other options within Safari don't affect the icon cache.

One strategy you could use is to brute force just remove all the favicons from the cache and let Safari start rebuilding them for every site you visit. That's done by using this command within the Terminal (Applications -> Utilities -> Terminal): find ~/Library/Safari/icons -type f -print | xargs rm. But there's a better way to accomplish this, a less brute-force strategy, utilizing a simple shell script.

A quick glimpse at the ~/Library/Safari/icons directory reveals that it's in a weird format that's not at all human readable. Further, each file therein is in a binary format suitable for Safari to read but certainly not anything we can figure out.

Which is where the wonderful utility grep comes in, because grep can scan data files looking for patterns just as easily as it can scan text files. Armed with that knowledge, and knowing that you can use the find command to traverse a directory tree, just matching the files and skipping the directories in the output, the basic command to find what cache files contain a given domain name is:

$ cd ~/Library/Safari/icons
$ find . -type f -print | xargs grep "askdavetaylor.com"
Binary file ./04/08/3481099592-1085979264.cache matches
Binary file ./08/05/3359939716-3145438806.cache matches
Binary file ./10/04/4077213356-2278820684.cache matches
Binary file ./15/11/1480449008-3264651962.cache matches
$

In this instance, I have found all the cache files that contain the string 'askdavetaylor.com', though you can obviously search for your domain instead.

The logical next step is to pour this command into a shell script and, um, add some bells and whistles to make it more useful. And so...

#!/bin/sh

# Given a specific domain name, this script will try to find all the 
# cached icons for that domain. With the '-r' flag included, it'll actually 
# remove those icons.
#
# This script is (C) 2004 by Dave Taylor. Permission is granted to 
#   disseminate this so long as this comment is retained intact. Learn 
#   more about Dave's scripts by visiting http://www.intuitive.com/wicked/ 
#   or ask Dave a question at http://www.AskDaveTaylor.com/

icondir="$HOME/Library/Safari/icons"
temp="/tmp/$0.$$"
removeme=0

trap "/bin/rm -f $temp" 0               # remove temp file on exit

# specified -r ?

if [ "$1" = "-r" ] ; then
  removeme=1
  shift
fi

# used properly?

if [ $# -eq 0 ] ; then
  echo "Usage: $0 {-r} domainname      ('-r' removes matching cached icons)"
  exit 0
fi

# is Safari running?  If so, that's a no-no

if [ $removeme -eq 1 -a \
      "$(ps aux | grep -i safari | grep -v grep)" != "" ] ; then
  echo "Error: deleting icons from the cache while Safari is running" >&2
  echo "is not a good idea. Quit Safari then run this script again." >&2
  exit 0
fi

find $icondir -print | \
  xargs grep "$1" 2>&1 | grep -v "not permitted" > $temp

if [ $removeme -eq 1 ] ; then
  for filename in $(cut -f3 -d\  $temp)
  do
    echo "removing file $filename"
    rm $filename
  done
  echo "Done. Now restart Safari and revisit that site."
else
  cat $temp
fi

exit 0

Since this script checks to see if Safari is running to avoid deleting cache files just to have them replaced, I strongly encourage you not to have the word 'safari' in the name of this script. I call it clearcache on my system.

For the basic search of cache files that match a given domain name, it works exactly as the command line shown earlier does:

$ clearcache askdavetaylor.com
Binary file ~/Library/Safari/icons/04/08/3481099592-1085979264.cache matches
Binary file ~/Library/Safari/icons/08/05/3359939716-3145438806.cache matches
Binary file ~/Library/Safari/icons/10/04/4077213356-2278820684.cache matches
Binary file ~/Library/Safari/icons/15/11/1480449008-3264651962.cache matches

To actually delete the cache files, add the -r flag:

$ clearcache -r askdavetaylor.com
removing file ~/Library/Safari/icons/04/08/3481099592-1085979264.cache
removing file ~/Library/Safari/icons/08/05/3359939716-3145438806.cache
removing file ~/Library/Safari/icons/10/04/4077213356-2278820684.cache
removing file ~/Library/Safari/icons/15/11/1480449008-3264651962.cache
Done. Now restart Safari and revisit that site.

Sure enough, revisiting the site now reloads the favicon.ico, which is to say that it's now the new favorites icon that's displayed and saved in the cache for next time.

A complex answer to what should be a simple question, but I hope that script helps you out! If you'd like to learn more about Mac OS X shell script programming, check out my book Wicked Cool Shell Scripts.