In some places it's also possible to use any image stored on local media as an icon.
These are taken from applications installed on the device.
Minor note: if the icon of the application changes, an update of previously created widgets/shortcuts can be forced by creating a single widget with the new icon and then rebooting.
Ipack Icon Sets
When setting an icon, you will notice an item labelled Download More Icons. Clicking on it will use the appropriate source depending on which version of Tasker you have.
You can also install your own icons directly into Tasker's icon directory /sdcard/Tasker/.icn/. Make sure the icons are in a subdirectory. The subdirectory should also only be one level deep (no subsubdirectories).
Icons must be in PNG format.
Example: a two-icon set called Christmas would have the two files in these locations: