The question is tagged with ce-1.7.0.2 but for future reference, if you are using ce-1.9.1.0 ee-1.14.1 or higher, the feature is already built in, with the so-called Configurable Swatches which allow "Product Image Swap".

You can enable this feature in System > Configuration > CATALOG > Configurable Swatches

Product Image Swap

The following animation shows how this works on product listing and product detail pages:

Swap Images Defined by Option Label

One way to configure swap images is to upload images to a configurable product with labels exactly matching the specific option labels (for example, Royal Blue).

Here is an example of a configurable product image gallery images that contains images for three colors:

Swap Images Defined by Base Image

Another way to configure swap images is to upload base images to each child product of the configurable product.

Here is an example of a Royal Blue child product with an attached base image:

Source and full documentation: http://docs.magento.com/m1/ce/user_guide/catalog/product-configurable-swatch.html

Group price will be applied across the board, however, you can still supply an over-ride on the associated products tab.

Let's say, for example, you set the grouped price for General to $10.00. You can see in the screenshot below that I have specified a fixed increase of $5.00 for the Blue t-shirt option. Thus, the price on the frontend would be $10.00 but if you select the Blue option, it will be $15.00.

That satisfy your needs?