no, a desktop-file contains a single icon-line.
The icon-name without extension and path (.png is default)

normally the desktp-file is installed in /usr/share/applications. The default-icon goes to /usr/share/pixmaps.

If you provide more resolutions they are installed in 
/usr/share/icons/hicolor/<resolution>/<group>/*.png
with <resolution> = "16x16" "32x32" "48x48" "64x64" "96x96"
All icons have the same name, as the size is given in the directory name.

Group is in your case "apps". If you use a path this icon is used, if not a special algorithm is used to show the icon in other sizes.

The exec line should be normally without path.

for a detailed description of desktop files look here:
http://standards.freedesktop.org/desktop-entry-spec/desktop-entry-spec-latest.html

Assuming that I have a couple of icons floating around and that I would like to create a proper bpmdj.desktop file. How do I doi that ?

Would the following work ?

[Desktop Entry]
Name=BpmDj - Free Dj Tools
Comment=See http://bpmdj.yellowcouch.org/ for more information
GenericName=BpmDj
Type=Application
Exec=/usr/bin/bpmdj
Icon= <???> bpmdj-icon-96.png
Icon= <???> bpmdj-icon-48.png
Icon= <???> bpmdj-icon-36.png
Icon= <???> bpmdj-icon-24.png
Encoding=UTF-8
Categories=AudioVideo;Player;

Would the above work ? Or is a special multi-iamge icon necessary ?

Wkr,

Werner,-

resize the logo.png to 32x32, 48x48 and 64x64 or add a new bpmdj.png to use 
in the menu entries.