The following are two examples of color. One is a very good use, the other is a failure:
This first site uses color in two very good ways. For one, it choose to use good organic contrasting colors that relate directly to the "Natural" or "organic" aspect of the site. Using a deep red and a vegetable green were good choices for the main image. As well as incorporating well photographed images overlaid over the woody background. It give a natural feel, while not making all of the colors the same, boring tone. This design can be seen as well thought out as well as making good use of contrasting and organic tones.
The second site dubs itself as the "Worst site in the world". It succeeds in doing this, with its horrible use of clashing colors and terrible layout:
The most terrible site in the world. The coral green against the puke orange background can only be described as atrocious. The dotted background and unclear use of colored links makes it very worse.
SO, as we can see color can be used to both make a site beautiful and functional.