Good grief ... we are talking about two different things ... 
You mean the Sub Category images when in a Category with subcategories *before* you get to the actual Products ...
The one I was talking about controls whether or not you see the Categories Image when you see the List of Products when in a Top Level Category or in a SubCategory ...
What you need to do is copy the file:
/includes/modules/category_row.php
to your templates and overrides directory:
/includes/modules/your_template_dir/category_row.php
And customize the code at about lines 39 to 40:
PHP Code:
$list_box_contents[$row][$col] = array('params' => 'class="categoryListBoxContents"' . ' ' . 'style="width:' . $col_width . '%;"',
'text' => '<a href="' . zen_href_link(FILENAME_DEFAULT, $cPath_new) . '">' . zen_image(DIR_WS_IMAGES . $categories->fields['categories_image'], $categories->fields['categories_name'], SUBCATEGORY_IMAGE_WIDTH, SUBCATEGORY_IMAGE_HEIGHT) . '<br />' . $categories->fields['categories_name'] . '</a>');
To not include the image:
PHP Code:
$list_box_contents[$row][$col] = array('params' => 'class="categoryListBoxContents"' . ' ' . 'style="width:' . $col_width . '%;"',
'text' => '<a href="' . zen_href_link(FILENAME_DEFAULT, $cPath_new) . '">' . '<br />' . $categories->fields['categories_name'] . '</a>');
Hate when I lose my mind ...