Depends what you are wanting exactly. You can paint with buttercream, royal icing, color gel paste, powdered colors, luster dust, or petal dust. There is probably more that I haven't thought of yet.
To paint with powdered colors, make a mixture of the powder and a alcohol-based liquid such as lemon extract, gin, or vodka. Make it thick enough to paint an area without streaking but not lumpy. You can also use nontoxic luster dust, petal dusts, or candy colors. I have even used my gel paste. You can then paint with a paint brush or a sponge. Just make sure you only use those items for food. I have tried this on fondant but I haven't tried this on crusting buttercream. I think it would work but someone else will have to share their experience.
You can also dry brush with any of the dust colors.
Painting with non crusting buttercream is like painting with watercolors. I have done one of these, it is in my gallery. If you love painting, I recommend it highly. It was lots of fun. Just color some icing and get your paint brushes and go at it. You can probably do this with crusting buttercream and royal icing. There is also brush embroidery.
Hope this helped.
Food coloring comes in many forms. Some people use powder food coloring for metallic and iridescent effects or to create very deep colors.
http://sugarcraft.com/D-coloring.htm
I would just start with what you have and experiment. I used brown gel paste mixed with vodka to paint the fondant on my foam board that my backpack was on.
I have watched Collete Peters paint with a sponge at one of the food network contests and it looked like she was using powder food coloring. Here is her link http://www.colettescakes.com/wedding_cc.html# The one that won her $10,000 is on the 4th row, 3rd column. It is called Four Seasons
I can't wait to have another chance to do another buttercream painting. Sometimes I feel like a little kid playing with fondant like it is play-doh and painting. 
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