As far as I know, it's forbidden to depict Muhammad precisely to avoid idolatry. I heard a liberal/moderate muslim scholar explaining that the founders of Islam didn't want believers to worship Muhammad as the Christian worshiped Jesus (since the only true god is Allah), and thus banned all pics of him.

Now, I might be wrong, and a muslim member might correct me (or rather, the guy who said that), but if that was the case, it pretty much failed, as the recent events shown us.