I'll try my hand at it. I'll start with the basics, some of it might not be 'technically' true but it'll serve as a good background. Digital pictures are made up of pixels. A pixel is essentially the smallest colored dot of a picture, you cannot zoom in any farther than that. When recoloring a black and white picture, what you're looking at is a photo of a person (or object, or whatever) where all of the pictures are pure black, pure white, or some shade of grey in between. What the person does is attempt to pick a color that would look right, like green for eyes and brown for hair, and replace the grey pixels with green or brown pixels. Doing purely that, however, would leave a person with a solid block of unicolor hair or eyes, which of course is not realistic. Instead, it's necessary to use data that is captured in the black and white photo, like hair texture and waviness, and kind of overlay a brown swatch on top of it. Photoshop has a feature called "blending modes" which let you choose how different layers of pixels interact with each other. For instance, if you have a yellow horizontal line on a bottom layer, and a blue vertical line on the top layer, under the "normal" blend modes the point at which they meet would appear blue, as that's what's at the top. However, if you switch to a different blend mode, it's possible to make it appear green, as that's what they look like combined.

When it comes to these guns, basically what you're trying to do is split the image into layers, replace the gun layer with a different gun, and then composite everything back together. So for instance, in this image there's the fingers which are around the gun, which are 'closest' to the camera. Behind the fingers is the gun which they're holding. Behind that is the background, which essentially is everything else in the image, and we're not concerned with editing that. So basically, you use tools within Photoshop to remove the fingers and put them on their own layer, separate from the entire image. Then you move the gun to its own layer. You then put in the Nintendo gun in place of the old gun, and place the fingers back on top. With a little blending, blurring, and color correction, it now appears that the person is holding a Nintendo gun instead of a real one. It's not really that easy, though, and this guy has done a hell of a job.