The latest update to iTunes 10 fixed a few known bugs with the initial release, but as expected Apple did not change the gray color scheme of the icons in the sidebar. We hope it will in the future, but for now the program will, by default, still come with the faded gray look in the sidebar.
For the initial release, people tackled this problem by editing the iTunes.rsrc file in the application package and adding their own custom color schemes to the program.
Despite having color in the sidebar again, people wondered if updating the program in the future would break the modifications, and this turns out to be the case. Any time the program is updated, Apple could include an updated iTunes.rsrc file, which will replace any modified ones people have installed.
Despite this, you can still use your old iTunes.rsrc file and retain your sidebar colors if you remember to back it up before updating iTunes. To do this, go to the Applications folder, right-click iTunes, and select "Show Package Contents." From here, navigate to the Contents/Resources/ folder and copy the iTunes.rsrc file from this folder to the desktop. Then upgrade iTunes to the desired version (you can leave the Resources window open when doing this) and copy the iTunes.rsrc file back to its location, replacing the updated one.
If you did not make a backup of your iTunes.rsrc file, you can get it from a Time Machine backup or just reapply it using the original instructions.