I've been wondering about this for a while now, and this is what I've found:
web2tile.com is gone but there is a backup site located at web2tile-mig.dotcloud.com.
However, you will notice that the script no longer works. That's because the author probably forgot to edit the icon URL within, as it still points to the old site. Taking a closer look at the script:
To make it work again, what you need to do on your phone is find this part of the script (go to IE, favorites, long tap web2tile, edit)
and replace it with:
Also, the method detailed in this post over at xda-developers to use a specific image for the tile still works.
But (and here's the but) this still only works for WP7.5 devices. I have not been able to get it to work during my brief time with an in-store demo of a Lumia 820/HTC 8X. I'm assuming some of the changes made to IE in WP8 render this hack useless (which makes me wonder whether it still works on WP7.8 devices (which I can't test either because HTC still hasn't come forth with a release date for the upgrade)).
Seeing as he hasn't been active here in ages I tried contacting the author via Facebook a while back to see if he's still interested in keeping up development, but I didn't get a response.
There are some apps in the marketplace that offer mostly the same functionality, but they're no real alternative for me. Due to the limitations of WP7 they all either have a splash screen with long load times, or open a separate instance of IE (usually both IIRC) which has no access to standard functionality like favorites and tabs. :/
Oh, one thing I forgot to mention: web2tile only works with http, not with https.