There is a lot of pretty good information about Wikipedia, but not about size support specifically:
http://en.wikipedia.org/wiki/Favicon
However, I do not think that most web browsers have a precedent for an icon larger than 16x16. Of course, I did not see the large icon, but I am not surprised, because large icons will tend to expand the URL headers, bookmarks and tabs to such an extent that they occupy prohibitively high vertical properties of the screen. I would not worry until you found out where it will be used, and decide what it costs.
One thing you need to pay attention to is whether there are any accessibility features used for low visibility users (this makes sense), but screenshots here (for example):
http://www.accessfirefox.org/Firefox_Accessibility_Themes.php
seems to show the same old 16x16 icon, despite the increased font size. I suspect that you cannot rely on the existence of 32x32-resolution, that no one spends time programming in the code that searches for it.
As I understand it, this function with multiple permissions for icons is intended to be reused in "other contexts" such as Prism (nonexistent) or Air (patented)
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