I modified Zoli's orginal contirbution found here -
in the work in the following ways --
1. No longer replaces existing files.
2. Puts the categories block (similar to new products block) on the home page.
3. Hides the categories left nav feature on the home page of the store
4. Makes this feature one that can be turned on and off in the admin file.
5. NEW: Only top level categories are displayed. (See the comment tag in the code if you want to have it display the categories based on image file name.)
A very easy modification! Includes a single SQL line for the admin feature. You can see this in use at http://www.ghostranch.org/catalog/index.php
This is a complete package.