How do I use an icon that is a resource in WPF?

Your icon file should be added to one of your project assemblies and its Build Action should be set to Resource. After adding a reference to the assembly, you can create a NotifyIcon like this:

System.Windows.Forms.NotifyIcon icon = new System.Windows.Forms.NotifyIcon();
Stream iconStream = Application.GetResourceStream( new Uri( "pack://application:,,,/YourReferencedAssembly;component/YourPossibleSubFolder/YourResourceFile.ico" )).Stream;
icon.Icon = new System.Drawing.Icon( iconStream );

Well, you don't want to use the resx style resources: you just stick the ico file in your project in a folder (lets say "ArtWork") and in the properties, set the Build Action to "Resources" ...

Then you can reference it in XAML using PACK URIs ... "pack://application:,,,/Artwork/Notify.ico"

See here: http://msdn.microsoft.com/en-us/library/aa970069.aspx and the sample

If you want to be a little bit more ... WPF-like, you should look into the WPF Contrib project on CodePlex which has a NotifyIcon control which you can create in XAML and which uses standard WPF menus (so you can stick "anything" in the menu).

I created a project here and used an embedded resource (build action was set to Embedded Resource, rather than just resource). This solution doesn't work with Resource, but you may be able to manipulate it. I put this on the OnIntialized() but it doesn't have to go there.

//IconTest = namespace; exclamic.ico = resource 
System.IO.Stream stream = this.GetType().Assembly.GetManifestResourceStream("IconTest.Resources.exclamic.ico");

   if (stream != null)
   {
       //Decode the icon from the stream and set the first frame to the BitmapSource
       BitmapDecoder decoder = IconBitmapDecoder.Create(stream, BitmapCreateOptions.None, BitmapCacheOption.None);
       BitmapSource source = decoder.Frames[0];

       //set the source of your image
       image.Source = source;
    }