I find the colors to be distracting (even when darkening the colors), but I do love the idea. If there was a way to only color the bottom status bar instead of the left and top as well it would be less distraction and still just as helpful when choosing between instances. Could this easily become an option?
Have you checked the docs or the settings to see if the features to enable or disable the coloring of different aspects covers what you want? For example you can choose to color the status bar but not the side bar or title bar.