Mike's suggestion for the checkbox is really the easiest thing to do, but it seems you're using backwards logic for some reason. Since the user doesn't actually see the contents of the field, why don't you store .F. for cases where you want to disply "N" or an unchecked box and .T. when you want to display "Y" or a checked box?
Juan has told you how to add the checkbox to the grid, but you'll also want to set the column's Sparse property to .F. so that you can see the checkbox in all rows.