Does Islam really ban all images of the Prophet Mohammed?

Another question from CNN. Let’s take a look at the Hadith this time:

We were with Masruq at the house of Yasar bin Numair. Masruq saw pictures on his terrace and said, "I heard 'Abdullah saying that he heard the Prophet saying, "The people who will receive the severest punishment from Allah will be the picture makers.' " (7.834)

Allah's Apostle returned from a journey when I had placed a curtain of mine having pictures over (the door of) a chamber of mine. When Allah's Apostle saw it, he tore it and said, "The people who will receive the severest punishment on the Day of Resurrection will be those who try to make the like of Allah's creations." So we turned it (i.e., the curtain) into one or two cushions. (7.838)

I purchased a cushion with pictures on it. The Prophet (came and) stood at the door but did not enter. I said (to him), "I repent to Allah for what (the guilt) I have done." He said, "What is this cushion?" I said, "It is for you to sit on and recline on." He said, "The makers of these pictures will be punished on the Day of Resurrection and it will be said to them, 'Make alive what you have created.' Moreover, the angels do not enter a house where there are pictures.'" (7.840)

According to a Wikipedia article, the Quran doesn’t strictly forbid pictures of Mohammed. Most Sunni Muslims believe that visual depictions of all the prophets of Islam should be prohibited. In Shia religion the depictions are common now. The only reference in the Quran that could be possible talk about images of Mohammed is the one about idolatry:

They set up equals with Allah to mislead people from His Way. Tell them: "Well, you may enjoy yourself for a while, but your final destination is going to be hellfire." (Quran 14:30)