Allright - I'm exhausted from research:
A (Stubborn) Client wants all sidebox links to be images - jpg (categories/subcategories/easy pages, etc.) instead of text.
This is my fifth hour searching this forum, and I cannot find simple, step-by-step plain english explanation.

I could 'hard-code' it, but I'm looking for more programmatical solution: so if a new category/subcategory/page is created, the image + rollover image should be created, and the rest is done in admin as usual.

I will very much appreciate feedback or direction (please, in really plain english if possible)

Thanks a lot!