I think I might be able to help you guys a bit here. I recently returned from the ICES convention and took 2 hands-on classes (from Bronwen Weber and B. Keith Ryder) and 1 demo (from Mike McCarey) about modeling chocolate. It's my new obsession!
I'm sorry if this is considered a plug, but I recently blogged about it here: http://melcakewalk.blogspot.com/2009/08/magic-of-modeling-chocolate.html
I'll be posting recipes there in the next couple of days, but there are also a lot of them online if you just do a quick search.
Yes, modeling chocolate is the same thing as candy clay.
I've read that you can use dust colors or gel colors to color the modeling chocolate, but that liquid colors are not recommended. I have not personally colored any chocolate yet, but will be doing it tonight. I'll post on my blog and here (if I remember) about how it goes.