First off, scan in your sunburned or discoloured photo. You should scan it in at about double your intended print resolution. This ensures you preserve the detail when you print, and it will automatically cover up any little glitches in your repairs.
Go to the Channels palette, and find the channel that has the most contrast, in this case the green channel. With sunburned photos, it will tend to be the green or blue channels, as there is excessive red in the raw image. Copy this channel into all the others. This will instantly give you a clear greyscale image.
Once you have your now-clear greyscale image, bring up your Levels dialog box and adjust to suit. Every image will require a different tweak, but I suggest you bring the left-most (black) arrow in until there is a little bit of the graph hanging off the left edge, and same again with the right-most (white) arrow. This reduces your tonal range slightly, but ensures a good solid black in your final print. Adjust the middle (mid-tones) arrow to suit the image. I usually take it to the middle of the tallest peak on the graph.
And we have your final image, ready for final processing. A slight unsharp mask (Filters >> Sharpen >> Unsharp mask) to bring out the edges, and you are about done. From here, you can attempt colourisation, repair scratches and dust specks, clean up over-highlighted areas, etc.
If you get lazy and just hit Desaturate (Image > > Adjust >> Desaturate) you will get something seriously ugly like this. Swapping into Greyscale mode (Image >> Mode >> Greyscale) will give you a useable image, but will not be as clear as channelcloning, due to the way Photoshop deals with the red channel in particular.
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