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Issue: I had created a vocabulary with taxonomy terms that had an Image field attached to them. I wanted to show the images in a view display instead of the terms.
Proposed Solution: Add a relationship to that display (you may have a number of choices that relate to taxonomy). Add the field that now appears in your field settings.
Failure: This works great if you have just one taxonomy term. However, if the taxonomy allows multiple values, then Views adds a row for each image, repeating the rest of the information in the display.
Workaround: Create a Views attachment that uses the relationship and the field and attach it to the other display that shows the rest of the information. Then style the attachment (via CSS) to place all of images on one line (and / or do whatever else to make it look right with the rest of the display).
You can see an example at http://www.physicalactivitynetwork.ca/timeline. Then choose one of the items presented on the timeline and you will see the full node view, which displays the images for the taxonomy terms. This same approach is used on many full node views on the site, not just for timeline pieces of content.
Keywords: Taxonomy, Images, Drupal 7, Views, displaying taxonomy images with Views, taxonomy_image