Hi Dean,
I'm afraid you've hit the usual problem with NTL output, it will only output composite or RGB signal, not an s-video one (check Guide/Settings/Visual Settings for options). So you may have the cable, but as you've found out the box won't play ball causing the black and white picture.
You could go with your option and it would work. The only slight issue is in theory you are going slightly down the video output scale from RGB to s-video. The usual flow, from worst to best is:
Composite
S-video
RGB
Component/HDMI/DVI
So you other option would be to either use an RGB to Component, or RGB to VGA convertor box. Note these are not there to improve the picture necessarily, just maintain the quality of the RGB signal, with the benefit of component or VGA output. Check out the Keene website for these type of convertors, plus
JS-Technology.co.uk, who get good press on these boards (I have a JSTech RGB to component for my NTL samsung box, connected to plasma and projector via amp).
Obviously, going this way rather than s-video will mean more cables, and more expense, than you're already chosen s-video route. I've never tried the s-video convertors myself, so can't comment on whether it would be good or not.
Cheers
Andy