Photoshop 7 Help - Can't get colors, only B&W

[NathanBWF]

So, I'm a total noob when it comes to photoshop but I'm trying to edit a jpeg that is mostly black and white. Anytime I try to paste a pic onto the black and white pic, it also turns to black and white. No mater what I do I can't get anything to keeps it color, nor can I manually add in any color. I'm sure it is a setting somewhere that I have to turn off or something...any PS 7 experts know the problem...?