I've just used panels to display child terms on taxonomy pages. For example If my heirarchy is like this...
Catalogue
--Category 1
----Sub Cat 1 (contains nodes)
----Sub Cat 2 (contains nodes)
----Sub Cat 3 (contains nodes)
--Category 2
--- Sub Cat 4 (contains nodes)
...the 'Category 1' page shows links to Sub cats 1, 2 and 3. That's working fine.
The problem is that once you get to one of the sub categories that contain nodes, the node teasers are not displaying. Is there a way of making these display?