Hand colouring is not as easy as 'painting between the lines', the colour is applied with tiny dots of different colours like a pointillism picture, if you try to paint as you would a water colour it will drag the water soluble emulsion and look awful.
It's easier to do it in Photoshop or similar, just turning down the Saturation of any colour image gives a Victorian postcard look especially if you use the Photocopier Filter to a copy layer which makes a line drawing, then turn down the Opacity.. See sample here.
http://www.flickr.com/photos/chris-judge/7678855822/in/photostream
Any kind of art form can be reproduced from any picture, Oil Paint, Watercolour, Pastel, Pencil Drawing, Coloured Pencil can all be created from a photograph in Photoshop. or Elements.
Another technique is to create a line drawing (using the above photocopy filter in PS or Elements), turn down the opacity to create feint guidelines, print it onto watercolour paper using a Laser Printer, prints from laser printers are waterproof, then you can colour it in using any medium.
Chris