That's almost what I was looking for, maybe it can be modified. What I need to do is have the 2 columns on the homepage, 1 for each category, and at the top show the category image. Not sure how to modify it (I'm not very good at modifying PHP yet) because I'm using Posts Per Cat to create the columns... unless I could create the columns manually, which probably could be done..
Maybe if I post another question in the forums on how to just show posts for a specific category using an if/then statement, then I could create the columns manually and add this plugin in there.
Thanks for your help! :)