What do you use to paint on fondant? Is straight luster dust and vodka ok or should I use powdered food coloring? What is the ratio to use to make it a good consistency??

You can use powder colors, dusts, or color gels mixed with lemon extract/vodka/everclear. Or you can use airbrush colors, which are already thinned down.

I don't measure. I just mix until it looks right. If it is really thin then it will be lighter. If it is really thick it will be dark.