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That's actually a pretty easy trick. Just get one of the disposable decorating bags and take a toothpick and put vertical streaks of food coloring on the inside of the bag. Then fill the bag with frosting as usual. The frosting will come out with colorful streaks in it. I put sort of medium purple frosting in there with dark blue and purple food coloring to kind of mimic hydrangeas.
I'd really like to try doing a "rainbow" of food coloring streaks with plain white frosting in the bag. I think that would be a neat effect for a child's birthday cake.
Neat... I'll have to try that sometime!