The colorize plugin computed the following image in a few seconds:
Note how I just drew some lines on the image instead of selecting precise areas to be repainted. This rough colorization was done in less than two minutes. Of course, I should have added a tiny white spot in each eye and selected a color for the shirt. Imagine what one could do with some time to spend on this task with old family photos.
You can see more examples on the plugin page.
Sharpening the image
Not too bad, eh? Of course, Gimp and those plugins are distributed under a Free Software license. Enjoy!