Some people play vanilla minecraft servers (not bukkit) and want to show somehow who are the moderators of the server by coloring their name, or just adding colored names for fun cause it looks good. Well, there is a simple way to do it using the /scoreboard command:
You can create teams of players using the /scoreboard command, you can add players to teams, and you can set color for every team - this will make the names of the players in a team to be displayed in their team color. (in the chat, in the list and above the player's head)
In bukkit servers it will not affect the chat, only the list and the name above the player's head.

Let's get started, first thing you wanna do is to create a team, for example I want all the moderators in my server to have their name in red so I will create a moderators team and set it's color to red:
/scoreboard teams add moderators
/scoreboard teams option moderators color red
Then I can add any player I want to this team:
/scoreboard teams join moderators playername