I played one called End of the Line or EotL. I still have flashbacks of magenta and cyan.... LOL or people shouting For Sale... PBaJS (sharpend) (enchanted) ;-)
I played on telnet client for forever. Bright Green Text on a black background. Eventually I evolved to a JavaMudClient that allowed me to set up tons of alias, actions, highlights, subs, etc.
During that time I figured out I could set the colors. Magenta was my default chat color. Red would be incoming damage/tells. Blue outgoing damage, green objects, and yellow would be npcs/pcs.
The funniest thing about my time from mudding would be my keybindings. I would bind bash which was an ability to stun your enemy took like a 3s cast time and stunned for 1.5 seconds or so. I would bind that to v. The actual alias would be bash $targ where I had hotkeys setup so I could quickly change my targets, and now in any game I play I bind my cc abilities to v. I bind my spamming key to c, and it is funny because my most spammed ability in the mud was close door :)