No, there's definitely a color version. Aside from the the drawings of your opponents before the match, there's not really any color in it, though, just black and brown instead of black and white. Last time I checked, Game Choice Club still had copies for $12 each.
There's a number of differences, but like CapcomFanConverted mentioned, the only one that's really major is that you can put the pieces you've taken from your opponent back on the board (within certain limits) and use them for your side. There's also a couple different pieces (gold and silver generals instead of the queen and also the lances) and some pieces move veryly slightly differently. This all makes the game very easy to learn if you're familiar with chess, but it totally changes the sorts of strategies you'd use. I like shogi a bit more than chess actually.