I think the problem of fading out the colour to black and white is that a lot of the interface is black and white already, so it won't be very obvious, especially to people will partial colour blindness. I don't like the idea of minimising the app either, for the same reason that you might at least want to be able to read the frozen screen. I still vote for an indicator either in the status area, or overlaid on/replacing the top-left task button.