Could you be a bit more specific? are you talking about a non-standard usergroup, that has it's own group color set, and said user is a member of that group, is not being colored as per the group? currently I do believe that it only goes on user_colour field in the user database, which could be why, but in looking I do believe that user_colour is based on the color for a group that a user resides in (as default group I do believe). So, adding a user to any group with a set color and having that be their default group, SHOULD update the user_colour field in the user table for that specific user, thus making their name be appropriatley colored in the legend.
Wheelguy: what are your delete_threshold, boardtimezone, and user_timezone settings, and, if possible do you know what your servers timezone/time settings are? I'll see if I can figure out why it would be doing that.