No, you can only change the text on an existing label in Outlook 2002/3. You cannot customize the colors.

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Sue Mosher, Outlook MVP
Author of Configuring Microsoft Outlook 2003
http://www.turtleflock.com/olconfig/index.htm
and Microsoft Outlook Programming - Jumpstart for
Administrators, Power Users, and Developers
http://www.outlookcode.com/jumpstart.aspx
> I've always wondered: Is there an easy way to add a new item (besides None,
> Important, Personal, Business etc.) to the list of labels? Say I want one
> called School. And if so, is there a way to make a custom color for it?
>
> Thanks all