The chat colouring in DDO is terrible for me, as I like to colour-code hits, misses, crits, different abilities, etc differently for easy viewing while I fight. It is pretty integral in my playstyle (and even with my immersion a bit) to be able to see what is going on - it kind of tells the story.
All combat text the same colour is basically useless. I currently have to stop after a fight and read the log back if I want to know specifics of what happened. Niceley colour coded combat text would give me more instantaneous feedback on whether certain attacks were hitting much, critting much, or how much activating some special ability alters a specific battle.
It was the same in LOTRO, so I started using a logfile parser that colour coded by keyword and kept it open on my secondary monitor. When I logged in, I just started logging chat for the combat window, tabbed out and opened that file in the log parser and was happy as a clam. I know it would be a fair overhaul to customize the chat window, but if you gave the ability to log the text to a file, it would be almost as good.
Thanks