Just as a useless note, SheepShaver will let you go down to 16/4 colors and B&W. On a PPC machine it runs using native CPU, thus it's potentially a more useful option then "Classic" to run really ancient software as long as said software doesn't poke the hardware too intimately. (Said software would probably crash a real Power Mac anyway.)

I wonder if the initial poster is remembering using a 5200-series all-in-one. Never used one myself, but since their motherboard was basically a Quadra with a PPC upgrade shoehorned in I'd imagine they supported B&W.