Might i recomment this snipplet...

Code:
on 1:LOAD: {
  /echo -s Initializing Color Chatter
  /set %chat.color 4
  /echo -s Chat color initialised to 4Red Please right click in the channel or query window to change the text color.
}

on 1:UNLOAD: {
  /echo -s Clearing Variables For Chatter
  /unset %chat.color
  /echo -s Chatter Uninstalled
}

#chat.color off
on *:INPUT:#,?: {
  if ($left($1, 1) !isin $+(/,$readini($mircini,text,commandchar))) {
    /msg $active $+(,%chat.color,,$1-)
    /halt
  }
}
#chat.color end

alias -l chat.color.pop {
  var %c = White,Black,Dark Blue,Dark Green,Red,Dark Red,Violet,Orange,Yellow,Green,Cyan,Teal,Blue,Pink,Dark Gray,Gray, %n = $$1 - 1
  if ($$1 isin beginend) return -
  else return $gettok(%c, $$1, 44) : /chat.color.set %n $gettok(%c, $$1, 44)
}

alias -l chat.color.set {
  /set %chat.color $$1
  /echo -a Chat Color has been set to $+(,%chat.color,$$2)
}

menu channel,query {
  Chat Color
  .Toggle Chat Color ( $+ $iif($group(#chat.color) == on, Enabled, Disabled) $+ ): {
    var %action = $iif($group(#chat.color) == on, disable, enable)
    /. [ $+ [ %action ] ] #chat.color
    /echo -a Color chatter has been $+($upper($left(%action, 1)),$right(%action, -1),d)
  }
  .Change Color
  ..$submenu($chat.color.pop($$1))
}


I just improves apon collectives code, and made the popup handle colors as well as its in an easy to manage dropdown >:D It also will work for queries and channels, not just channels laugh