While the debate and disagreements over the role of colorization of photographs and film still rages, color photography did actually exist during the early 20th Century. Unfortunately long exposure times meant that action shots were impossible. It was also an expensive process, and remained more expensive than Black and While until well into the second half of the 20th Century.
CNN has released a recent photoblog containing extant color photographs from World War I. The photos themselves are from a new Taschen book, The First World War in Colour. Included in the online collection are a crashed French airship, a British tank (possibly a Mk IV), as well as self-propelled anti-aircraft guns.
For me these color pictures help make the conflict more real and relevant to a modern audience. Black and White photography far too often seems to create a sense of distance or at least abstraction. Color photographs present a vastly more vibrant and alive world. As a figure painter and model-builder, these color photos also provide a good reference point, though I wouldn't try to color match using the early photos!