Try this -
Type
/nick
in the conversation window
then press
Ctrl-k
and select any colour you want to use
then, type the words you want in your display name and press enter
See if that works
There is an alternaltive and its alot easier to use, its called Colornick V2, theres a link to it in my signature. It's a messenger Plus! plugin and its really easy to use to color your display name. The thread i've linked to tells you all the features it has, and how to use it. Enjoy.