This film is a silent film as movies did not have soundtracks until the late 1920s. The first movie with sound was The Jazz Singer (1927) although it took a while for sound technology to be prevalent.
http://www.imdb.com/title/tt0018037/trivia?tr0626469
Instead, a live musician (usually a pianist) or musicians accompanied the film. For more information on the musicians and their music, see this article:
http://www.mont-alto.com/photoplaymusic.html
Cara Schreffler provides more information here:
http://www.markmusicproduction.com/blog.php?id=34
Even today there are silent film musicians. Ben Model talks about the process of accompanying another film by Murnau:
http://www.youtube.com/watch?v=DT6jeBC1dSs&feature=related
Here you can listen to him playing:
http://www.youtube.com/watch?v=7Z6hgc6I4-s
Rosa Rio played from the silent film era to 2009:
http://www.youtube.com/watch?v=2_kZzmpAU8Q&feature=related
Additionally, Nosferatu is an Expressionist film, rather than a realistic one. Therefore, mood and imagery are especially important even if they don't seem terribly realistic. I'm not sure that you may classify Nosferatu's colors as part of its expressionism. Although movies included some color much earlier than I had thought, this technology was used fairly sparingly until after WWII. See Adrienne Redd's article for more information about the use of color in film:
http://www.criticism.com/md/film2.html
I'd like to close with a few scenes from Murnau's film.

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The rats have arrived in the city with the count and his coffin-laden ship. Naturally, all of the humans on the ship are dead...or undead. By the way, officials in Delft, the Dutch city where Herzog began filming Nosferatu, forced him to stop because of the rats. Perhaps there is something to be said for CGI.