HI, shepflylow. What you need to do is to select modify...color...element. When the dialog box to select the elements comes up, pick the "methods" button and select "by material" option. Then you have to enter the material ID number that you want to change the color of, and you can then select from a pallette, etc. Unfortunately, you can't color them by material automatically. That said, you CAN create groups based on material, property, or element type automatically.
You can also pick elements that are a certain color to change them to another color, or select by property ID or element type. It's just that it is all manual.
To view the model with element colors and the deformed shape, select the postprocessing button, and select the "post data" button that looks like braces {}. Then pick your output data set, and under "output vectors," select "total deformation" under the "deformation" heading. Then display the model in wireframe or hidden lines, with or without fill, whatever your preference is, and press the "deformed" button (with the bent cantilever beam on it). This will display the deformed shape without deformation values or contours, and so will retain the element colors. To get any useful information out of it, though, you will have to select "total deformation" under the "contours" heading also, and select the buttons for either a contour or a criteria plot. The element colors will be obscured by the plots.