Rooms: To enable colors in room's description type 'set color_room yes'. To disable this option, type 'unset color_room'.

Channels: set channel_color <channel>:<color>[, <channel>:<color>,…] set channel_output <type> [<type2> … <typeN>]

Valid colors modifiers are:
off, normal No ANSI formatting
bold [<color>] Bold characters
blink [<color>] Blinking characters on
inverse <color> Inverse characters on
underline Make characters underlined

Colors are:
red, green, blue, brown, yellow, pink, magenta, cyan

Valid outputs are for now:
llama capitalize all words
crystall type like a retarded monkey
You can combine outputs by sparating them by a comma.

Example:
set channel_color chat:brown, servint:bold, wiz:bold red
set channel_output llama
set channel_output llama, crystall

See also: help sound