The following are a few common problems that arise when working with colorspaces and blending modes:
The problem is that the blending modes for the painting tools are controlled from the Brush Selection dialog, not from the Layers dialog. Type C-S-b in the image window or click on the Active Brush in the Toolbox window to bring up this dialog.
Check that the Brush Selection dialog's blending mode is set to Normal.
You are working on a grayscale format image. Convert the image to RGB by selecting the function RGB from the Image:Image/Mode menu.