The SP-700 does not allow you to take photos in black&white. It will let you convert color photos to black&white, however. See the "Editing Still Photos (REDEYE FIX/BLACK&WHITE/SEPIA" section in the advanced manual (page 78 in my copy).
If you need a manual, you can get one from the manufacturer at
http://www.olympusamerica.com/cpg_section/cpg_support_manuals.asp?id=1196
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