Is it best to add the color when melting the marshmallows? I ended up with cramped hands when I decided to add the color the next day.

yep, its the only way to do it!!!

Alternatively, microwave it a little bit. I microwave it in 12 second intervals until it is nice and pliable.

I always melt the marshmallows in the microwave and put the coloring in before I stir them, kinda when they are still a lil puffy.

Works like a charm!

It is the ideal way to go, but if you are using fondant that is not the color you want and you need to color it, then warm it up in the microwave. If you coat your hands with shortening before mixing it will keep the fondant warm longer and wash off any color you get on your hands easier.

Microwaving first is the ONLY way I'll color fondant...it makes it so pliable and easy to blend.

Thanks so much! It will definitely make things easier for me!