This trophy is titled "In Living Color" and it's for using each of the color palettes for one character. Different colors are selected by pressing different buttons on each character, however the best means of going for this achievement is to keep playing with one character and selecting them with "start". This will bring up the list of different colors you can select. Simply fight one round battles and make your way down the list. The trophy will pop as you select the final color palette before the fight even begins.