This might be different for different rooms.
I also use the colour scheme, except for some reason I reversed it, and it's too late to change.
For me:
Red := Watch out. Tight, aggro or both.
Yellow := did something highly unusual (almost all of these have a comment)
green := Please play at my table, preferably on my right.
blue := tight ( < 15 vpip )
Who to label:
When I sit at the table, if there are players there unmarked, who show > 20 hands in the HUD, I mark them Red, with no notes.
If they warrant a different colour, I switch it.
If they warrant a comment, I add it.
When I'm joining tables, I look to keep greens on my right, and blues on my left.
--VS