I know how theres the option to change gun camo I beleive, but can you change the colour of you character? Since it's faction vs faction I don't think It would make much of an effect on whos on your team.

So can the colour of armor or character clothing?

Yeah, you can change pretty much everything regarding character appearance

also, have you read http://www.fragworld.org/frag/community-blogs/brink-info-pt-3-weapons-and-customization.html? that should answer your question

True, but one remark: You can choose from an array of colors when choosing your gear, but they are preset and not all colors are available for each side iirc. I thought they wanted to keep the green,blue more for security, while giving orange, brown, red to the resistance. Or atleast up to a certain level.

Yeahh, I was gonna mention that - figured I'd just refer Arrow Slayer to the holy text and save myself the typing though..

There's different colours, you can see some examples here.
http://www.brinkthegame.com/features/customization/

Simply put, the Resistance has 'warm' colours, whereas the Security has 'cold' ones.