Copy the icon first to another location, say your Desktop. Then change the extension from .ico to .bmp. You can then work on the icon in any program that handles bitmaps, such as Paint or PaintShopPro, or, I assume, Photoshop. Work your editing magic, and save the work as a 256-color/8 bit bitmap. Change the extension back from .bmp to .ico and you're done.
Tom