You probably did not do anything incorrectly.
Even in v4.0.13 the
"No Image Available" category icon is still displayed even if there is no image assigned.
This is also true in the product area, bestsellers area, etc.
I posted a mod for this earlier.
Just follow the link below and look for the source code posted on "
Mon Mar 14, 2005 12:14 am" and disregard the source code before that date. The reply starts with
"I finally got the code straight".
http://forum.x-cart.com/viewtopic.php?t=17584&highlight=
Hope this helps...