I have the naming mods thing sorted now thanks to all your help, so can you now explain to me how I can make the mods usernames a different colour please?

admin panel => users & groups => user settings => Colorized Usernames Enabled? make sure you click yes. Also make sure the moderator is in the group other wise his name won't change.

if you want to make the mods a different colour, go into admin>>>users and settings>>>groups, find moderator group, edit it, half way down you can choose what colour you want it to be.