The overlay mode doesn't effect pure black and white pixels.
Try viewing your image at 100% view (actual pixels) (double click on the Zoom Tool in the Toolbox)
Views other than 100% may not give you an accurate view of your image especially when it comes to how blending modes interact between layers.
I'd suggest using a solid color fill layer and bringing up the Blending Options dialog where you can scroll through the different blending modes
to see the effect on your image while your image is at 100% view (actual pixels)
Glorious! Thank you for the info. Wish I'd known that tid bit prior to working at it for an hour, LOL.
Is there a way to "colorize" this image? When I tried "Hue/Saturation" still had a similar problem.
Hue/saturation has the same problem as overlay, but you can colorize the image checking colorize and by moving the saturation and lightness sliders to the right.
Did you try the different blending modes with a color fill layer?
It really depends on the effect you want.
For example you could set the foreground color in the toolbox to Red and the background color to White.
Then when you use the graphic pen filter the black pixels will be red and the white pixels white.
The colors for the sketch filters in the filter gallery are dependent on the colors you have set in the toolbox.
If you planning on using the image for the web, you could reduce the pixel dimensions of the image (Image>Image Size)
and then the overlay mode would work for colorizing the image if that's the effect you like.
The reason that works is that resizing introduces a little bit of blurring (for lack of a better word) around the edges.
Message was edited by: R_Kelly