Well, the favicon.ico rollout didn't go exactly as planned, but it was more or less added to clean up the apache error logs, which would return tons and tons of errors when apache couldn't load user favicon.ico files.
Basically to fix this, all you need to do is just create a new file, it can be 0k, and just rename it to favicon.ico and that will get rid of the current one. If you want, upload a 16x16 or 32x32 gif instead and rename that to favicon.ico and that would display instead.
I'm not sure yet whether or not they will remove the .ico serverwide, if I hear anything else I'll post it, but for now thats the fix.
I may not be smart enough to do everything, but I'm dumb enough to try anything.
PS I no longer work for Bluehost, any posts from me may not be official company policies or views and should not be associated with Bluehost.