Categories Image & Featured Product

-Where can I see the category Image on my store?
-What is the Featured Product? and where can i see them?

1) Subcategories are shown with images if theirs parent category template is set to "Products in grid" (ProductsInGrid.ascx user control).

2) Featured products are now shown now. But you modify Templates\Categories\ProductsInGrid.ascx to show it

ProductCategoryCollection productCategoryCollection = ProductCategoryManager.GetProductCategoriesByCategoryID(CategoryID);

Each of ProductCategory item has IsFeaturedProduct property. Use it.