Xcode/the Developer tools is an optional install - you can find the installer on the Software Install and Restore DVDs that came with your PowerBook. However, it will be an older version (as XCode 1.5 was only released last week) so you will need to download that to upgrade it (it is a free download).
The ability to run Classic apps is not going to be phased out anytime soon - there are still lots of people who will need to be able to run old software for a long time to come yet. What has been phased out is the ability to boot your new PowerBook into OS 9 (this is for hardware reasons, not software ones, btw).
As for your old versions of software - that is because the licence agreement between Apple and the various third party software developers was made quite some time ago. With Graphic Converter, I think you may be able to update to GC 5.x for free but I'm not 100% on that - ask Lemke software.