Now, here's the whiz-bang portion of the coloring process. Download these filters:
MultiFill and Flatten. There's a demo on their use at that link, and Dean has another one
here.
9. With the duplicated layer selected, apply MultiFlat. Make sure it's the duplicated layer. If it doesn't run, make sure you've set your file to RGB.
There are two open fields on the control window for MultiFlat: Join Area and Flag Area. I think I have both of these set to one pixel. If I fooled around with them more, I could optimize things a bit more, but, so far, my experiments have only yielded chaos.

As you can see, MultiFlat fills in all line-enclosed areas with random colors. This was the reason for step 8.

10. Apply Flatten. Flatten gets rid of the black lines, and squooshes the color areas to together until you end up with something like this. The idea is that it's now very easy to select the different color areas with the wand tool, and fill them in with the colors you want.

11. In order to see your full image while working on it, either set the color layer to Darken, so that you can see the black line work through it, or, preferably, copy the line work to a new layer.
To do this, (a) click on the background layer, and then (b) magic wand a bit of the black line. (c) Go to Select/Similar to make sure you get all the black pixels selected. (d) Choose white as your background color. (e) Cut the selection out of the background layer, leaving it all white. (f) Create a new layer above the color layer. (g) Paste your black pixels there. (h) Lock this layers transparency.
Why do all this? It gives you more flexibility, which we will take advantage of tomorrow.
12. Okay, back to the colors. First thing I did was select the tannish color MultiFlat had assigned to the space around our terrible pugilist and deleted it to show the white of the background layer.
13. Then, I selected the color blobs that covered the face and hands and filled in a vaguely fleshy color. There's no need to agonize over your color decisions, just plunk something in there.

14. And then, you can fiddle with the color to your heart's desire by going to Image/Adjust/Hue & Saturation. The control box that opens up will let you turn any color into plumb near any other color, and is a much easier way for me to find the color I like than peering at swatches, because you get to see your color choices in context.
In this case, I lightened the value, and dropped the saturation on the skin tone. I may have nudged the hue slider around a bit, too.

15. Repeat steps 13 and 14 with all the color blobs. Continue, until you pretty much have all the colors where you want them. Proximity to other colors changes our perception of color, so don't be shy about going back and adjusting colors you have already laid down. Once I put the hair in, I went back and lightened the skin up even more.
Done? Nah. If this were a painting, this'd be the stage we'd call "body color." Lots more tomorrow!