Just in case anyone has read this and wondered how to do this in Elements if you don't have CS2, I was having a look at this last night. Thankfully, it's just as easy.
1. Create a new Hue/Saturation Layer above your picture
2. Decrease the saturation to create a b&w image
3. Use the normal eraser on the Hue/Saturation layer and that will erase the parts of that layer bringing back the original layer where you've erased.
I also played around with adding other layers in the middle to change colours around as well.
I'm probably the only person working with Elements that it took a few minutes to figure out how to replicate this, but thought I'd try to save others the trouble if they were in the same situation
