We currently support icons in manifests that are URLs pointing to external resources, but we do not support icons that are data URLs
Data URLs are now supported in the feature/native-app branch as of this commit: https://github.com/mozilla/openwebapps/commit/045086aa2c883f44d2d394e5185a3412994f4e68 Verified with bwalker's app: http://birdwalker.com/bird_walker/webapp_install/
How can QA verify the fix? Are there steps that we can follow? Thanks in advance!
Bill Walker created a test app that uses an icon data URL (linked in comment 1). You can manually test with that. Ideally we would generate some test apps with various icons (all embedded in the app manifests as data URLs), and have an automated process that installs those apps and checks the natively-installed icon against the reference icons.
Mohamd ? update
Tested with openwebapps-5761c50c73-12_08_2011.xpi from http://people.mozilla.com/~dclarke/openwebapps/Extension/. I installed Bill's app from http://birdwalker.com/bird_walker/webapp_install/. Verified with FF9 and Windows Vista/7 (app icon support for XP still does not work but should be verified when it does). Closing for now and can be re-opened if it doesn't work on XP once icon support is done.