I created three views in Drupal 7.8 and Views 3 + Views Field, nesting one view into another using Include View, and I got such a result (attached). 
Step-by-step how to do it:
Create vocabulary "Colors" and fill it in with tags.
Create a new view of taxonomy nodes Colors - I call it "Nodes of Colors"
2.1 Format Table , Settings: Grouping field: Taxonomy term: Name
2.2 Advanced Contextual filters: Taxonomy term: Parent term
2.3 Advanced Relationships: Taxonomy term: Content using Color
2.4 Set Fields: Taxonomy term: Term ID, Taxonomy term: Name, (field_color) Content: Title
2.5 Filter criteria: Taxonomy term: Vocabulary (= Colors)
2.6 If you want you can also set "Exclude from display" for Term ID, Taxonomy term: Name
2.7 Set Path:/nodes-of-colors/%
2.8 Set no results behavior: Global: View area (we will come back to this later) 2.9 save
3.Create a new view of taxonomy nodes Colors - I call it "Nodes of Colors 2"
3.1 Format Table , Settings: Grouping field: none
3.2 Advanced Contextual filters: Taxonomy term: Term ID
3.3 Advanced Relationships: Taxonomy term: Content using Color
3.4 Set Fields: Taxonomy term: Term ID, Taxonomy term: Name, (field_color) Content: Title
3.5 Filter criteria: Taxonomy term: Vocabulary (= Colors)
3.6 If you want you can also set "Exclude from display" for Term ID, Taxonomy term: Name
3.7 Set Path:/nodes-of-colors-2/%
3.8 Set no results behavior: Global: none
3.9 Save
Go back and edit "Nodes of Colors" again
4.1 go to Set no results behavior: Global: View area
4.2 Set View to insert: View: nodes_of_colors2 Display: page
4.3 set Inherit contextual filters
4.4 save
5 Go back to Views again (Type Term)
5.1 Create a new view of taxonomy nodes Colors - I call it "Colors Tree"
5.1 Format Table , Settings: Grouping field: none
5.2 Advanced Contextual filters: none
5.3 Advanced Relationships: Taxonomy term: Parent term
5.4 Set Fields: Taxonomy term: Term ID, Taxonomy term: Term ID , Taxonomy term: Name, View: Include View (Include View)
5.5 Filter criteria (1): Taxonomy term: Vocabulary (= Colors)
5.6 Filter criteria (2): (Parent) Taxonomy term: Term
5.7 If you want you can also set "Exclude from display" for Term ID and a label of Include View
5.8 Set Path:/colors-tree
5.9 Set no results behavior: none
5.10 save
...and this should be it, finally.