Other than birds, nothing of the dinosaurs survives until the present day, and most of what is known about them is known from fossilized bones, prints, feathers, and some proteins (from a T-Rex last year.)
So how would you figure out what a dinosaur's colors were? You can't find it in the bone, and no useful amount of dinosaur DNA could survive even in amber. You would have to find evidence of pigments at a very microscopic level. Animals have colors because of an organelle inside cells called melanosomes, which absorb light in specialized cells called melanocytes. Find those, and you find the color of an extinct animal.
Using an electron microscope, graduate student Jakob Vinther and colleagues at Yale examined melanosomes in a well preserved Sinosauropteryx fossil.
Able to detect the shape and density of Sinosauropteryx's melanosomes (in their fuzzy feathers), Vinther was able to piece together the animal's colour scheme, revealing a banded tail and reddish orange body feathers.
So take your first look at a dinosaur. (Courtesy National Geographic)
The results reported today show that the filaments are packed with melanosomes in the same way as modern feathers.
"These filaments are probably the evolutionary precursors of true feathers," Benton said.
The Smithsonian's Sues added, "I think that one can safely say that this find invalidates some recent attempts to deny the existence of protofeathers in birdlike dinosaurs by claiming (without compelling evidence) that they are degraded collagen fibers."
Sinosauropteryx is a Chinese dinosaur known from the early Cretaceous, and may be related to Compsognathus.
(Compsognathus, to give you some idea, were the little guys in Jurassic Park II who attacked the little girl on the beach, and ate some dude who wandered away from the Marlboro men trekking through the jungle later in the film.)