Paul also said that our Lord Jesus is "the visible image of the invisible God". The question of images became a huge issue around the 8th century AD. Muslim armies had, in the 7th century, conquered the Persian Empire and had conquered the Levant, Egypt, and spread throughout North Africa. The Eastern Roman Empire (aka the Byzantine Empire) had lost a lot of land to the Muslims. It came as a shock to the Christians living there, as for centuries the Roman Empire (East and West) had been predominately Christian. Also, at the time, many Christians were unsure of what to make of Islam, it wasn't viewed so much as a completely different religion at the time, but was seen as a heretical sect. Whereas in the West, after the fall of the Western Roman Empire to the Germanic "barbarians", those same "barbarians" converted to Christianity.
So some in the Eastern Church wondered why, it seemed, God had "sided" with the Muslims against Christians (a very earthly and wrong way of looking at things, obviously, thinking that God is on the side of the victors in a conflict). And so some, such as Emperor Leo III of the Byzantine Empire saw that the big difference (from his perspective) was that Muslims forbade all images, while Christians had images. Leo concluded that perhaps God was punishing them for having images, and so began a campaign of Iconoclasm (literally "image-breaking"), banning images in churches.
Theologians and clergy were appalled by what Leo was doing, because for them this wasn't merely an act of the State against the Church (which it was), nor was it merely an absence of having images; rather they saw it for what it was: An attack on the fundamental and essential doctrines of the Christian faith.
The problem with Iconoclasm was that the core doctrine of our Christian faith is the believe that God became man. The invisible God, the Eternal Logos, God the Son Himself, became human. Assumed our humanity. Jesus is both God and human, without separation. Thus the theologians of the time saw this as an assault against the very doctrine of the Incarnation, it was an attack against Jesus Himself and everything we believe about Jesus as Christians.
Eventually this resulted in the convening of a Church-wide council, only the seventh to ever happen in the history of Christianity. And the subject of this council was the matter of Iconoclasm and the need to defend the Faith.
The Council gathered at Nicea, even as the very first Church-wide council had met at Nicea centuries earlier in order to defend the full and complete Deity of Christ against the Arians.
The Council thus, after much meeting and examining the Scriptures and taking all that had come before into account, ruled this way: Images of Christ are not in violation against the making of graven images for the injunction against the making of graven images is because God is invisible. And thus, images of God the Father and God the Holy Spirit were to be rejected, for God cannot be depicted; images of the Incarnate Son were absolutely valid. For God has taken upon Himself visible human flesh, and to depict that visible flesh does not wrongly depict God, just the opposite, it rightly reminds us of the Incarnation. So images of Christ should not only not be rejected, they should be celebrated: God became man, this is our faith, all praise and glory to God. In the same way, images of creatures should not be prohibited, so there should be no prohibition against images of the saints, for such images act to serve as reminders of God's saving work and grace throughout history. That the lives and memories of the saints can be to our benefit, even as we read in Hebrews that we are surrounded by such a great cloud of witnesses--the saints surround us and cheer us on as we run the race of faith here in the world.
So rules were put forward that governed what images meant and what their purpose was, it also ruled that there were lawful and unlawful images. As noted, it is unlawful to depict God the Father or the Holy Spirit, for God in His Essence is not to be depicted for it cannot be. Which is why only images of Christ were considered lawful.
So, no, images of Christ do not violate the commandment against graven images and idols; and it does not go against what Paul said there in the Acts. We do not have images of the Invisible and Divine Essence which cannot be depicted, we have images of Christ, the visible Icon of the invisible God. For these images are not the object of our worship, but are fingers which point to the object of our worship: Jesus Christ our Lord.
Hence Christians have always had and used images. We can see this going back and looking to ancient times, such as the ancient catacombs. It is only with the rise of Iconoclasm many centuries later that the presence of images became a matter of debate--and the reasons behind that debate had nothing to do with theology and Scripture, but because an emperor wanted to impose his will on the Church because he wrongly believed that God favors whoever wins in war. It's no different than had Leo tried to replace the Bible with the Qur'an in the churches.
We don't see Iconoclasm again until modern times. Some radical Protestants (and when I say radical, I really mean radical, the sorts who also burned and looted churches and monasteries, who assaulted priests and monks, and who engaged in widespread unmitigated violence) resurrected Iconoclasm. Martin Luther and other leading members of the Reformation condemned these radicals. Iconoclasm, again, shows up now and then among some Protestant groups today. But it is a theologically anemic doctrine, it is a false piety.
That is not to say that anyone HAS to have images. But to condemn images is problematic in Christianity, because the very heart and core of the Christian faith is that the Invisible has become Visible in Christ. God's grace and power is not "invisible" but visibly manifest. God works through the visible and external means of Word and Sacrament to give us faith. The Scriptures are visible, external, we read them as ink on a page, we hear them as words spoken as audible voice. It is with physical and visible water that we received our baptism in the Name of the Father, Son, and the Holy Spirit. We receive visible, physical, tangible bread and wine in the Lord's Supper. Iconoclasm fundamentally denies the visible and external works and word of God--and that is spiritually dangerous. It leads us away from trusting in the Gospel, trusting in Christ, trusting in the word of God and toward trusting other things. When all the while Christ is right here in our midst, in His word, in His Sacraments, in the love and fellowship of His Church coming together in His name.
And an image of Christ reinforces this: Christ really is here with us. The Crucified and Risen Lord, He who is seated at the right hand of the Father is He who said, "I am with you always, even until the end of the age" as He is here, in Word and Sacrament. The visible and the invisible meet and come together, the infinite and the finite are together; God is here with us. And reminding ourselves of this, taking every opportunity to find ways to be reminded that God is with us is important. That we are reminded over and over again of His promises.
-CryptoLutheran