For a long time FamFamFam icons were standard when small 16×16 were needed. But, they are not developed anymore and they are lacking many common icons. So, in search of better set, I have found truly amazing Fugue icons by Yusuke Kamiyamane.
Set is regularly updated and new icons added almost daily. Current release 2.6.4 has 2646 icons (16×16) with 171 bonus icons (24×24). To top things, set features full PSD sources for all icons so you can mix different elements to create icons you need. Set features all icons with and without shadow, easy to follow naming conventions and detailed preview images.
Set is released under Creative Commons Attribution 3.0 license, and that makes it free, but you need to include link back to the author somewhere in your project. Or you can purchase royalty-free license.
We are using Fugue icons for control panels in xScape Theme Framework, and also in new control panel for upcoming GD Star Rating 2.0. Also, all other plugins will start using them as needed. This is really amazing set, and no other set comes even close in size and quality. If you need small, button sized icons, look no further.
Fugue Icons: http://p.yusukekamiyamane.com/