What does painting tubes do?

Painting tubes is only effective in conjunction with a device that can paint items, like a filter, retriever, or a sorting machine. Painted tubes will not allow items of any other color to pass through (though unpainted items can still pass through). Painted items will not prioritize the colored route, however; they will still go to the nearest available inventory. They just can't travel down tubes painted a different color.

The most obvious application is with a chest and sorting machine based sorting system, where each chest is assigned a different colored tube, and the sorting machine paints items the appropriate colors to allow the correct items to filter to the correct chest.

Painting tubes is purely a method of identification, Just like Unionhawk said the painting is only useful when the painted tubes are used with other Redpower items like Sorters, Filters and Retrievers.

The only really effective use i've found for colouring pipes is the sorting machine, Painting a section of pipes will draw items given the same colour in the sorting machine towards that pipe, Where it goes from there is up to you whether it's into a chest or a machine.