This button lets you take whatever icon you are looking at in the Target Icon File window (the large window in the center) and apply it to the currently selected layer in Photoshop.
Why is this important? Say you’ve found a really cool 32-bit folder icon and you just love the way the transparent shadow was created. Using the “Open” button, in conjunction with a blank layer that you used to launch IconBuilder, you can apply that cool folder into your PS layer. There it waits for you to edit and use.
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