On top of that I want to be able to let child taxonomies of a term with an image cascade up and show that image. And as always these should be wraped in links to the taxonomy lists.
I think this was the idea behind taxonomy_image (not updated to 4.6 yet/ever?).
Yes, taxonomy_image will allow you to do this. I have not had the time to upgrade that module to 4.6 yet, but I plan to by the weekend. It hasn't happened yet as I was planning to see if the new image.inc could replace some of the custom functions currently performed within the taxonomy_image module. The taxonomy_image module intentionally has a very narrow feature set. I have no intention of making it any more complicated. I rely on the module for my website, so it will continue to be upgraded and maintained. I usually try and upgrade my modules prior to an official Drupal release, but have been lacking in time of late. Cheers, -Jeremy