All the information described here is assuming a GNU/Linux installation. If you have something else (like e.g. a Sun running X or so) you can get and compile the actual software yourself.
The colour version of 'xterm' is based on the standard xterm source with a patch available from any X11R6 site. The xterm distributed with R6.3 is rumoured to have native colour support, but is untested by me.
See the documentation if you use an older version of X. Note: I haven't tried this myself!
'ls' is in the GNU fileutils package available from prep.mit.edu or one of the several mirrors. Get at least version 3.13.
I have myself successfully compiled color-ls on Solaris, SunOS and Irix.
I would appreciate feedback on this text. My e-mail address is email@example.com
Thorbjørn Ravn Andersen