is dynamic map compatible with shivering isles? DOes it also add a colored map for it?

As it stands, no. The mod incorporates a number of Tamriel maps that were made by others and adds dynamic features to them, including overlays. I think other Tamriel maps could be added easily enough by tweaking the parameter files, but I suspect that an SI version would require permission to amend the original esp or perhaps producing a rather complex patch - if possible.

OK, should've looked. Here you are, just the thing, complete with .ini fixes for Dynamic Map:

http://www.nexusmods.com/oblivion/mods/45768/

Smart mod. Hadn't thought it would be clever enough to pick up on multiple maps.