Tried many, none of them are freeware, I know gimp can edit icon but not cursor, besides, it's too big for a icon editor, any others?

Here are a couple of them:
http://www.snapfiles.com/Freeware/gmm/fwicontools.html

Paint.NET (freeware)
Requires Microsoft.NET Framework 2.0.
You need to download this icon import/export plugin, it only does 32x32 icons though. Edit: Works best when importing .png images with the background already transparent, of course you can use the Eraser tool to erase the background.

Clic (freeware)
A small user friendly image to icon program. Creates 16x16, 24x24, 32x32, 48x48, 64x64, 72x72, and 96x96 icons. Can save with transparency.

the plugin doesn't support just 32x32. you probably have an older version . right now, it can do 8-256bit along with support for compressed PNGs(a new standard in Vista). it also does animated cursors

He's updated it since I last used it, good it sure needed it!
It's actually been a while since I used Paint.net on my system (several versions). I've given up on it completely because about 80-90% of the time it won't load with some Microsoft .NET DLL error pop-up (even after doing a complete uninstall of Microsoft .NET and a clean install), and only rebooting would allow me to use it, too frustrating to deal with.

Hi
http://www.photofiltre.com/
but i'm not sure if it supports cursor, it's full graphic software but small in size.
hope it can help you

Is it freeware without any adware/spyware?

Yeah andavari its clean. I've had that installed for a while now.
It has some really cool effects and stuff you can do to your pics.
http://www.softpedia.com/get/Multimedia/Gr...otoFiltre.shtml

The Softpedia.com page gives a good decription of it, and it looks good so I'll try it out because I really need something to take the place of Paint.net and MS Paint sure isn't doing it.