I assume you are talking about Picture–Controls Monochrome Picture Mode; this is kind of attribute applied to NEF and not real effect that modifies RAW data, it is not even seen in programes that do not support Picture–Controls (Photoshop for example) and could be changed to something else using CaptureNX for example.
You could probably have better results using other software on your computer (Photoshop will do great things either alone or even better if using Silver Efex Pro already mentioned here).
And yes, if you setup Picture–Controls to Monochrome Live-View will show you BW image.

I am seriously considering buying the D3x, but have two important questions that I need answers to that will help with my decision. I am hoping some of you knowledgeable "Nikon"ers will know the answers!

1. Can the D3X shoot RAW B&W? I know there is an available Monochrome Picture Mode but don't fully understand it. Is the Monochrome mode applicable to shooting JPEGS only, or can the camera actually shoot in RAW B&W? Or, is the Monochrome mode an "effect" that you can apply to the RAW image after shooting it in color? If so, does the file become non-RAW at this point, or does the information get applied to the RAW file itself?

2. Is there a B&W Live-View mode available?

I await your replies. Thanks in advance!

-Harsh Agrawal