you can also use MathMap (I like the flexibility, I don't much like how it sometimes crashes under Windows -- doesn't take GIMP with it, but it's still annoying. OTOH, being able to build complex generators and save them for later use is awfully nice).

As for the color, I usually take the heightmap, duplicate the layer (so I don't lose the heightmap in case I need it later, this step is destructive) and apply gradient color to it, usually going brown to a very pale grey (HTML #dddddd). If you go to white, you'll lose the ability to bumpmap, this pale grey is just enough you can still see them.