This isn't working for me for some reason---no matter what, I just keep getting the little "pen and paper" icon when I create the app. I've tried different file formats for the icon (jpg, gif, png) and then adding it as you describe above to the script at the beginning, and also doing it at the end. Any idea what I could be doing wrong? Thanks.
Thanks everyone. Indeed the file format was the issue--I used this free Img2icns app, and got it working fine putting it into the script as an .icns file, as well as dragging and dropping in the Get Info windows.
I was trying jpg after reading the last post in this: http://cycling74.com/forums/topic.php?id=19952
but jpg doesn't work for me at least--all I get then is the little "jpeg" icon.