Hi there I was thinking and I decided to make a tutorial for anyone who wants to color sketches made by themselves or by others. I have no talent myself so I often color work of others like this pic over here. This tutorial is based on sketch my mate did for himself and I decided to pimp it out and here's how I did it ^_^
Software I use

Photoshop (any edition from CS series will do)
Inkscape (Free Vecor art software)

1a)First thing you need to do now is to blow the image up as much as your RAM will allow it to make things easier later on.

1b)Use ctrl+M to open "curves dialog window" while there hit Auto button and apply the changes.

1c)Come back to the Curves window and create an "S" shape in the box as shown in the picture. This will make dark tones darker and light tones lighter, and it will make it easier for Inkscape to create a path out of it you can also play with the brush here to close all gaps and trace the lines if you want but it is a lot of work and makes lines look thick but it does make ink more refined so it's your decision.

2) You should end up with picture that looks like this. as you can see all lines are black and look more and more like an ink. I filled the eye with white color because Inkscape would make entire eye look black and that would cause problems later on so if you have colors on your sketches you should do the same and leave only lines.

3a) Import your JPEG. to Inkskape and go to Path>>Trace bitmap this will convert your image into Vector Map. It is important step to make colored artwork look more professional, smooth and to eliminate all white blobs that usually appear on the edge between the colors and lines.

3b) As you can see here on the closeup the lines are filled with rincles and uneven. up to this step most of your work could be done by the Photoshop and Inkscape but now you need to roll up your sleeves and work by hand.

4) This step is long and tedious and sometimes even annoying but all this hard work pays up ^_^. As you can see in second close up all useless anchor-points are removed and lines are smoothed up. entire feel of the picture is now different. it's no longer a sketch but beautiful smooth inked line-art.

5) Flat colors here you just take paint bucket ant flush all the spots where you want color with the color you want. I use different layers for each color and mask to point where that color should go but I will cover it in different tutorial as well as how to make nice fur and other effects