IMO thats
complete rubbish, putting the cables in the wrong way round makes no difference
at all, it simply doesn't work/display right, I do it all the time. Sounds like your buddy is lying out of his arsehole/ blaming the wrong thing.
I'd give the spud garantee on this, but i don't ever garantee anything on principle
There are two possibilities:
Your problem is that you probably don't have your "tv device" (called a monitor on your comp) to the right region. I believe uk is pal-I. If you put NTSC it displays in black and white and if you put pal in an ntsc region it displays in black and white also. You need to look at the region settings for your gfx card.
and the second:
You have it in the wrong mode, I don't need tv-tool for ATI, but I assume you have it in SVHS/S-VIDEO when you using composite? Click the button to change the mode and it will display in colour.
When I last used TVtool, it was the second.
On a side note, I'm pretty shocked nvidia still haven't sorted their TV-out, its been an issue for ages and they still haven't done bugger all to improve the situation. Luckily there is tvtool, but they shouldn't rely on a 3rd party to get their device working to any competant level
Then again, the Geforce 440MX I got upstairs doesn't even need tv-tool, it can do everything in the latest nvidia drivers without the bloat of another program. Try dump the tool and sort the problems through 2nd button on desktop>properties>Settings