To assign a colour to a usergroup, you need to edit the usergroup in your admin control panel and in the HTML markup boxes place the HTML that you wish to use to display the username. This will then appear everywhere where the username appears with the exception of the last box boxes and thread starter information in forums.
If you want a key below that to explain what each color means, then there are a couple of legend modifications available. Try searching for legend in titles only (via advanced search) and you should then find one.
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