Tuesday, December 1, 1998 Published at 17:21 GMT
Dresden Cross presented at Windsor
The first state visit to Windsor Castle since the fire
Mr Herzog and his wife Christiane were the guests of the Queen and Prince Philip in the first state visit to the castle since the 1992 fire.
The president's four-day visit to the UK is aimed at developing closer relations between the two countries.
It was commissioned by the Dresden Trust, a UK organisation which raised around £300,000 from individuals, charities and companies across the country.
The Queen herself contributed directly to the fund.
It is a symbol of reconciliation between the UK and Germany, and was presented as a gift for the people of Dresden.
Until then it will go on display at Coventry Cathedral, which was itself severely damaged in German bombing raids.
Alan Smith's father piloted a Lancaster bomber which took part in the air raids on the German town.
Mr Smith, a silversmith, said: "It was one of the things he was never really happy over himself, after the bombing of Dresden.
"This is now a monument to him, to say sorry, or everything's going to be OK."
Before the ceremony, a guardsman was injured when his horse reared backwards, missing the Queen's car by inches. He was later discharged from hospital after treatment for a shoulder injury.