There are many ways to turn a color image into a black and white image, but some are better than others.

Don't Do These:
The easiest way is to Desaturate the image (Image -> Adjustments -> Desaturate)
You can also change the Image's color mode to Grayscale (Image -> Mode -> Grayscale)

Both of these ways are permanent and give you no control over how the colors are converted to black and white.

Try These:
I like converting color images to black and white by using adjustment layers. This allows flexibility in how the colors are converted and allows me to go back and make changes. It also keeps me from having both a color and a black and white version of every image. And finally, it allows me to use the same settings from one image on other images.

An adjustment Layer is basically a set of instructions telling the pixels how to look. Think of it like a printing recipe for your negative. Adjustment layers affect all pixels below it in the layer stack.

To make an adjustment layer, click on the black and white circle at the bottom of the layers panel.



Here you can choose either "Black & White" (New in CS3) or "Channel Mixer". You can also choose Gradient Map, but it usually gives you too contrasty an image, so I usually use it in combination with one of the first two.

When you make an adjustment layer, it creates a new layer above your selected layer. This new layer is a set of instructions and can be turned on or off clicking the visibility eye to the left of the layer. Notice that it also creates a white box on the layer. This is called a layer mask and will come in handy later.



Above is the Black and White Adjustment Layer.

Just by creating an adjustment layer you get a better black and white than if you had just desaturated the image. Now you can use the sliders to fine tune your image. There is no set amount of any slider that is considered "right" so move them until they look good to you. When you are done, click the OK button.

The best thing about adjustment layers, is that you can double click the symbol on the layer and it will re-open the panel allowing you to make changes or fine tune the image.

Here is the Channel Mixer Adjustment Layer:



For this one, don't forget to click the "Monochrome" button at the bottom. The original thinking was that the total of all the sliders should equal +100%, but honestly, it really comes down to how the image looks, so you decide. The constant at the bottom is an overall darkness slider.

If I think I need a little more contrast, I might add a Gradient Map Adjustment Layer:


Be sure to choose a black and white gradient and to click reverse if it looks like a negative.

To see the difference between the two, just click the eye off of the gradient map layer. To lower the effect of the Gradient Map Adjustment Layer, just lower it's opacity on the layer panel.



Whichever method you choose, your goal is to get the best image without sacrificing detail.

You want a full tonal range from your shadows to your highlights.



Other Ways:

Calculations:
This is a really old way of creating a black and white image that some people still swear by. It basically just combines two layers and lets you define how they will mix (blending mode). You can find it under: Image -> Calculations

LAB Conversion:
This conversion uses the Lightness channel from the LAB color mode. From the file menu choose Image -> Mode -> LAB Color. You won't see much of a change yet.

Go to the Channels Panel and click on the channel that says Lightness.

Now go back to the mode menu and choose Grayscale (Image -> Mode -> Grayscale). It will ask you if you want to toss out the other channels. Click OK

Now go back one more time to the mode menu and choose RGB again.

If the image is too light, duplicate the layer and change it's blending mode on the layer panel to "multiply". Now move the opacity slider down until it looks good.

RAW B&W Converter:
We will explore this in the RAW Panel Primer.