There are curlies who color and/or highlight their hair, so I'm sure that either can be done as long as you're careful. I believe kathymack does highlights so hopefully she'll come back and comment.

I personally had a really bad experience with highlights, so I ended up dying over everything with a color as close to my root color as possible. I will eventually need to do this again as the color fades from the highlighted hair (or the gray hairs get to me- not sure which will happen first).

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Modified CG since 11/5/11
CLEANSE: CJ Daily Fix, DevaCare No-Poo, CHS Treatment Shampoo
RO: SS Caitlin's Conditioner, CJ Beauticurls Strengthening
LI: SS Repairing Protein Treatment, CHS Silk Leave-In
STYLE: Re:Coil, Curl Keeper, Deva Ultra Defining Gel, Curls Rock Amplifier,Sweet Curls Elixirs Okra Gel and Hard Hold Gel, SS Curl Enhancing Jelly and Firm Hold Gel