You will now have to remove the background that is surronding the image.
I usually select a small selection of the background with either the lasso or
magic vand tool, and then pressing delete. Do one of the following instructions
until the entire background is gone.
Now, make sure to make your icon square, and you are almost done.
In order to maximize the icon to 80x80 pixels limitations, you'll have to
make the icon take up as much of the avaible space as possible. Use the
rectangle selector, and crop the image so there are at least 2-3 pixels with
blank space left.
Go to the "Image" menu and select "Canvas Size..."
You want to make the image square, so do as the picture
is showing below.
Part 3: Resizing and optimizing