You have to turn off the layer that you *don't* want to affect. In the Layers tool window, make sure that the layers aren't linked, and that the paintbrush indicating the active editing layer is in the row with the background layer. You can also lock the layer that you *do* want to affect in the Layers tool window.
I am not familiar with the "Remove Color" command. I'd use the Saturation slider under
Layers->Adjustments and gradually reduce saturation. Then I'd double-click on the layer in the Layers tool window and decrease the layer's opacity until it was where I wanted it. Unless you've added additional layers, this is going to look kinda strange, but I'm sure you know what you're trying to do.
If this doesn't work, I'll check on a PC at work tomorrow. All I have at home for Photoshop is Photoshop CS on my Mac. We have a PC running Photoshop 7 at work and I can get an exact workflow if you need it.