Categories wont work properly, using Category Images plugin

So I’ve modified a theme to my liking, and then I decided to use images to replace the standard text category tags after each post.
I found this http://coffee2code.com/wp-plugins/#categoryimages quite fast. I implemented it and it worked fine visually untill I realised that when I click the category images it wont link me to the page with those categories ONLY.

Usually when you click on a category (without permalink adjusting), the link looks like this:
http://grazdesigns.com/amilia/?cat=3
But when I hover over on the category image as of now, it looks like this:
http://grazdesigns.com/amilia/?cat=

So when I click on it nothing happens and it redirects me back home as if nothing would have happened

This is the site I’m referring to http://grazdesigns.com/amilia/

And this is the index.php source

<?php get_header(); ?>

	<div id="content-wrap">
	<div id="content">
	<div class="gap">

	<?php if (have_posts()) : ?>

		<?php while (have_posts()) : the_post(); ?>
<div <?php post_class(); ?>>
			<div class="post" id="post-<?php the_ID(); ?>">

				<h2><a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to <?php the_title_attribute(); ?>"><?php the_title(); ?></a></h2>

<div class="posties clearfix">
<div class="one">

				<div class="entry">
					<?php the_content(__('Läs mer!','yashfa')); ?>
                                        <div class="under-more"></div>
				</div>

<div class="tagged">
<?php the_tags(__('Tags: ','yashfa'), ', ', '<br />'); ?>
</div>

</div>
<div class="two">
<div class="dater">
<h3><?php the_time('j') ?></h3>
<h5><?php the_time('S') ?></h5>
</div>
<p class="metadata">
<span class="comments">
<?php comments_popup_link(
__('<span class="bigcom">0</span> <span class="smallcom">kommentarer</span>','yashfa'),
__('<span class="bigcom">1</span> <span class="smallcom">kommentar</span>','yashfa'),
__( '<span class="bigcom">%</span> <span class="smallcom">kommentarer</span>','yashfa')); ?>
</span>
</p>
<div class="categories">
<?php c2c_the_category_image();?>
</div>

</div>

				</div>

				</div>

</div>
		<?php endwhile; ?>

<?php if(function_exists('wp_pagenavi')) {  ?>
         <div class="navinavi">
         <?php
          wp_pagenavi(); ?>
          </div> 

          <?php } else { ?>
          <div class="navigation">
            <div class="alignleft">
              <?php next_posts_link(__('&larr; Previous Entries','yashfa')) ?>
            </div>
            <div class="alignright">
              <?php previous_posts_link(__('Next Entries &rarr;','yashfa')) ?>
            </div>
          </div>
          <?php } ?>
          <br class="clear" />
	<?php else : ?>

		<h2 class="center"><?php _e('Not Found','yashfa');?></h2>
		<p class="center"><?php _e('Sorry, but you are looking for something that is not here.','yashfa');?></p>
		<?php include (TEMPLATEPATH . "/searchform.php"); ?>

	<?php endif; ?>

	</div>
	</div>
	</div>
<?php get_footer(); ?>

I appreciate any help! Thanks beforehand!