[R] Factor variables with GAM models

[Noah Silverman]

I'm just starting to learn about GAM models.

When using the lm function in R, any factors I have in my data set are 
automatically converted into a series of binomial variables.

For example, if I have a data.frame with a column named color and values 
"red", "green", "blue".   The lm function automatically replaces it with 
3 variables colorred, colorgreen, colorblue which are binomial {0,1}

When I use the gam function, R doesn't do this so I get an error.

1) Is there a way to ask the gam function to do this conversion for me?
2) If not, is there some other tool or utility to make this data 
transformation easy?
3) Last option - can I use lm to transform the data and then extract it 
into a new data.frame to then pass to gam?

Thanks!!!