Are heading elements block or inline elements?

They are block elements.

If you look at the HTML 4.01 strict DTD:

<!ENTITY % heading "H1|H2|H3|H4|H5|H6">

<!ENTITY % block
     "P | %heading; | %list; | %preformatted; | DL | DIV | NOSCRIPT |
      BLOCKQUOTE | FORM | HR | TABLE | FIELDSET | ADDRESS">

So, they are all defined as %heading entities, which in turn are part of the %block entities.

As for the question regarding if you can change the color – that’s just styling and is fine, though I would do so in a CSS file, not inline:

H1, H2, H3, H4, H5, H6 {
   color: #ccccc;
}