This tutorial for creating a grid for categories with images.
You can do it without editing the core files of Magento
*Create a new file called “category_listing.phtml” on this directory “app/design/frontend/default/YOUR_TEMPLATE/catalog/navigation/”.
*Add the following code on that file:
<?php $_maincategorylisting=$this->getCurrentCategory();?>
<?php $_categories=$this->getCurrentChildCategories();?>
<div class="widget widget-viewed">
<div class="widget-products">
<?php $_columnCount = $this->getColumnCount(); ?>
<?php $i=0; foreach ($_categories as $_category): ?>
<?php if($_category->getIsActive()): ?>
<?php $cur_category=Mage::getModel('catalog/category')->load($_category->getId()); ?>
<?php $layer = Mage::getSingleton('catalog/layer'); ?>
<?php $layer->setCurrentCategory($cur_category); ?>
<?php if($_imageUrl=$this->getCurrentCategory()->getImageUrl()):?>
<?php if ($i++%$_columnCount==0): ?>
<ul class="products-grid">
<?php endif; ?>
<li class="item<?php if(($i-1)%$_columnCount==0): ?> first<?php elseif($i%$_columnCount==0): ?> last<?php endif; ?>">
<a href="<?php echo $this->getCategoryUrl($_category); ?>" title="<?php echo $this->htmlEscape($_category->getName()); ?>"> <img src="<?php echo $_imageUrl; ?>" width="135px" height="135px" alt="<?php echo $this->htmlEscape($_category->getName()); ?>" /> </a>
<h3><?php echo $this->htmlEscape($_category->getName()); ?></h3>
<?php if($_description=$this->getCurrentCategory()->getDescription()):?>
<p class="category-description"> <?php echo $_description; ?></p>
<?php endif; ?>
</li>
<?php if ($i%$_columnCount==0 || $i==count($_products)): ?>
</ul>
<?php endif; ?>
<?php endif; ?>
<?php endif; ?>
<?php endforeach; ?>
</div>
</div>
*Go to the Magento admin panel CMS -> Pages -> Add New Page.
Page Title: Categories
URL Key: categories
Status: enabled
Content:
{{block type="catalog/navigation" column_count="3" name="catalog.categories" template="catalog/navigation/category_listing.phtml"}}
*Click on Save Page.
*You can access that page from here:
http://www.domain.com/categories
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I have tested it on Magento 1.4.1.0 and it works GREAT