Matt Fulling uses Photoshop to color his photos (colorizing? colorizations?
). Anyway, I usually use Corel Paintshop Pro X to color photos. I can get out a colorized 90x135 photo in about 10 minutes using it. I own Photoshop CS3, but IMO is a little bit more clumsy to use if your goal is just to add color to a small black and white image.
But regardless of what program you use, it mostly comes down to the image that you're working with. The majority of the images that Matt uses for his 1900-1910 players are photos taken by Bain or whoever the unknown photographic superstar was who worked for the Chicago Daily News at the beginning of the century. They're absolutely stunning and almost impossibly sharp. They make for some real blazers when you add color to them, as you can see from UKBBF's posts. If you use a fuzzy image and try to color it, you're just going to get a fairly shoddy image no matter how talented of a graphics manipulator you happen to be.