The correct answer in this case is that the image can move within the area of effect defined in the spell's description, which you set at the time of casting. Once you define that area, it remains fixed in space, though the caster can move around freely within the spell's range of it without dispelling the illusion.
You could, for instance, make an illusion of a man walking down the street towards a store as long as the point where the man originated was within the spell's range at the time of casting and the path he walked would fit within four 10' cubes plus one 10' cube per caster level and remained within range of the caster at the time the spell's area was defined. While the man walked, the caster could freely move around so long as they remain within long range of the area they designated when casting the spell.