Hi there,
try to change
{if $subcategories[cat_num].icon_url} ... {/if}
to
<A href="home.php?cat={ $subcategories[cat_num].categoryid }"><IMG alt="{ $subcategories[cat_num].category|escape }" border="0" src="{if $subcategories[cat_num].icon_url}{$subcategories[cat_num].icon_url}{else}{$xcart_web_dir}/icon.php?categoryid={$subcategories[cat_num].categoryid}{/if}"></a>