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This question has probably been asked before, but all of the answers I have found have been for vastly different versions, and it seems like the UI has changed a lot.
How can I set up a material to use so that it displays in the Materials viewport shading mode? I'm fairly new to Blender, and I've managed to accidentally enable "Nodes only" somehow in the Materials tab.
The texture is already set up and the object is UV unwrapped - I just need it to display now.
Here's what I'm looking at now: 
Cycles works with shaders.
Shaders determine how the light is transformed upon hitting a surface.
The error on your case is that you created a node in blender internal and not in cycles. You can use nodes in blender internal as well, but they are not compatible.
NOtice how the nodes are completely different in Blender Internal:
Materials are not interchangeable between the two rendering systems. You need to delete the material and make a new one within cycles.
Your image is plugged directly into the output - your image should be plugged into a shader node like Diffuse first, and that plugged into the output. I have a video concerning texture paint in cycles that I did exploring what I need to do for paint reasons, but it might give you some insight as to what is going on. cycles video
