Converting an image from color to greyscale can be achieved in 2 ways:
1. Using the contone feature. Just click on white or right click on black to set the light and dark colours of any bitmap (it's a sort of short-cut to colouring bitmaps. Usually a click on the color will fill a shape and a right click will set the line colour, but for bitmaps we take this to mean set the two colors of a contone.)
You can use the same technique to easily create a sepia effect. With the photo selected, just right click on the Color editor icon on the color line, (which would normally edit the line color, but in the case of bitmaps lets you edit set the 'dark' colour) and now just select a dark brown color and you'll have a sepia photo.
2. Double click the bitmap to go into XPE, select the enhance dialog and enter a value of -100 in the color saturation field, click Accept to send it back to Xara Xtreme.
Both methods just apply a temporary greyscale to the bitmap. You can get the original color back in case (a) by left clicking and right clicking on the 'no color' icon. In this case 'no color' means put back the original colors. In case (b) double click the bitmap and in XPE reset the saturation back to 0 and it will restore the colors.