If a user does what she asks, the fountain faerie shall bless them with the ability to change into any color they want of their species! However, the fountain faerie quests are elusive, due to the fact that the fountain faerie rarely requires an item. If you are asked by her, I would advise against turning her down. The following is an example of what occurs during a fountain faerie quest.
After giving her the item.
At this point, I was able to change my active pet to the one I wanted to paint. I believe it needs to be done before going to the rainbow springs in Faerieland.