To resolve the brightness dispute, I think the "normal" colours should just be a bit darker (eg dark red, dark blue, etc etc). If the player could select the display settings, this obviously wouldn't be an issue, since each player would only be making it difficult for him/herself if they selected earthy colours/similar colours. On the other hand, however, I can see team battles online getting a bit hectic. Take this scenario, for instance (p1 + p2 are on same team):
p1: "kill those red guys near the gate!"
[p2 starts killing someone comlpetely different]
p1: "not him! he's attacking the red guys right now! Let him!"
p2: "but he is red!"
p1: "No, he's not! He's yellow!"
Of course, this situation could easily be handled by referring to other players as their username or player # for that map, but some people would find it difficult to remember that everyone else is seeing everyone differently.
It's just a point to take into consideration, anyway.