Magento – How to add new or customize existing top header links in Magento

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I want to change the existing top links AND add some new.I need them to be in larger font (not default one) with icons or images before them. I read some tutorials and came to know its done by writing XML but could not find where to write XML and where to add icons and CSS classes for styling. Also tell what else needs to be done apart from adding XML.
For reference, see the example image attached with top links outlined in black line that's exactly what I am looking for. Please elaborate your answer as much as possible and mention all steps.

Please see this image for reference

Best Answer

<block type="page/template_links" name="top.links" as="topLinks">
 <action method="addLink" translate="label title">
   <label>Blog</label>
   <url>/blog</url>
   <title>Blog</title>
   <prepare/>
   <urlParams/>
   <position>1</position>
   <liParams>class-name</liParams>
   <aParams></aParams>
 </action>
</block>

place above code in app/design/front/[Your-Package]/[Your-Theme]/layout/local.xml in <default></default> element.

Style it using "class-name"

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