It was surprising for me when you wrote that the Kaaba contains an icon:
The story goes that he sought refuge in Ethiopia where the Christian King took him in and helped him. There Muhammad learned much about Christianity. Later on, when he returned to Mecca victorious, he smashed all the idols in the Ka'baa except one- an icon of the Theotokos holding the Christ-child. It's reported to still be there.I am curious where you heard it reported that the icon of the Theotokos was still there?
The Answering Islam website mentions opposing answers by earlier and later traditions about whether the icons were destroyed along with the idols:
"Apart from the icon of the Virgin Mary and the child Jesus, and a painting of an old man, said to be Abraham, the walls inside [Kaaba] had been covered with pictures of pagan deities. Placing his hand protectively over the icon, the Prophet told `Uthman to see that all other paintings, except that of Abraham, were effaced." (Martin Lings, "Muhammad: His Life Based on the Earliest Sources", ref: al-Waqidi, Kitab al-Maghazi 834, and Azraqi, Akhbar Makkah)
"On the day of the conquest of Mecca the Prophet entered the House (= the Kaaba) and sent al-Fadl ibn al-Abbas ibn Abdalmuttalib to get water from the well of Zemzem. He ordered to bring pieces of cloth and to imbue them with water and then he commanded to wash off these pictures, as it was done. He stretched his arms, however, over the picture of Jesus, the son of Mary, and of his mother and said: 'Wash off all except what is under my hands!' But eventually he took away his hands away from Jesus, the son of Mary, and his mother." (al-Azraqi)
My guess is that he didn't destroy the icons, considering that especially in such an early period of Islam there was alot of respect for Christianity, while his main target was paganism. Further, the destruction of the pagan idols would have been an act that would find sympathy among Christians.
Currently it appears that there are no such icons in the Kaaba, although it looks like there is a golden cross design on a white cube, which I am curious about:
It's at 0:24-27 in the video:
If you watch it, you will also notice lamps suspended from the ceiling like we see in Byzantine-era churches in the Holy Land.
From Archimandrite Daniel of Indonesia's discussion with "Road to Emmaus": http://www.roadtoemmaus.net/back_issue_articles/RTE_11/The_Kaaba_and_Jacobs_Pillow.pdf
"RTE:Is the Kaaba solid or hollow inside?
FR. DANIEL: Hollow, it is like a house. There is a door through which you can
enter. Any pilgrim can go in if he is allowed to by the authorities. There is
nothing inside, it is empty. In the 17th century, interestingly, there were
reports that there were some icons inside, and I recently heard a secondhand report that the icons are still there.
RTE: Icons! Why are there icons in the holiest structure in Islam? Islam is
FR. DANIEL: Before the rise of Islam, the pagan Arabs had a great yearly
bazaar, called the “Bazaar of Al-Ukaz.” People from all over Arabia and nearby countries would come to celebrate around the Kaaba. They did this to
honor the gods of the Kaaba, because the Kaaba housed many idols, the foremost of which was the god Hubal. (Also famous among them were the socalled “daughters” of Allah, namely: Al-Lat, Al-Mannat, Al-Uzza, although
Muhammad denied vigorously that Allah had any daughter or son.)
This celebration in Mecca drew not only pagans, but also middle-eastern
Christian monks, bishops and evangelists. One of the greatest events was
the famous Arabic “poetry” competition, and many of these Christians composed Christian poems to compete with the pagans. They also used this
occasion to preach the Gospel to the Arabs. In their competitions with the
pagans, who had statues of idols, the Christians displayed icons of the Lord
and the Mother of God, hoping that the pagans would become interested in
Christianity. These were all in the Kaaba.
When Muhammad conquered Mecca without bloodshed, he commanded
that all the idols be destroyed and the Kaaba dedicated to “Allah” alone.
During the rampage of destruction, Muhammad saw his troops about to
smash the icons, but he stopped them, putting himself between the
upraised arms of his followers and the icons. He forbade their destruction,
saying that these two icons must not be destroyed because they are pictures
of God’s prophet and his mother. So they were saved from destruction. As I
said, there are reports that the icons are still there in the Kaaba, but I have
never seen them personally. This is as much as I know."