This is an Easy to use Plugin to Create, Customize, Manage Taxonomies as well as Manage its Custom Meta Fields. Now add images to category/tags.
I tested a few taxonomy creators.
Ultimate Taxonomy Manager - brilliant. Taxonomy appears in sidebar of admin menu, allows u to manage it. The Taxonomy appears in post and allows you to choose from past terms. (great for not duplicating terms.)
GD Custom Posts And Taxonomies Tools - creates taxonomies but you cannot choose from popular choices, and cannot manage. not user friendly. The taxonomy is not visible in sidebar.
Highly reccomended: Ultimate Taxonomy Manager
and works fine.