This is exactly what I was searching for.
I wanted to use a custom image for each article as the read more link, and this mod let me do it.

I actually wanted the image to still show when you read the article, but this is easy. Just comment out the 3rd to last line of code:
//$article->text=preg_replace('#{readmorelink}(.*?){/readmorelink}#s', '', $article->text);

The image will still show but it will not be a link

Also, this mod DOES NOT work out-of-the-box with some 3rd party modules, eg YOOdrawer (www.YOOtheme.com)
However, it only took me 5 minutes to mimic the effect within that, I posted my solution in the YOOthemes forum.