First thing you're going to want to do it test it on another TV. If the color works fine on another TV it might have something to do with the imput jacks on the one you're currently using.
If it's still in black and white, check the connections. With a lot of cables (s-video, component) the wires can fry out easily. I'd try changing them out before calling microsoft just to save time. The other thing is to make sure the connections are in the right place (either matching up the colors) and make sure they are in there tightly.
If you go through all of that and it's still black and white, it's an issue with the x-box and you'd want to call Microsoft to get it fixed/replaced under the warranty.
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