Vertex colors will be set depending on the selection mode.
Vertex, edge and face select modes (
TAB) each have different effects.
An easy to access color selector to select the color hue and shade.
The Set Color button sets the color to the selected faces.
Click on the color preview to the left of the Set Color button to get a more detailed color wheel that supports RBG, HSV and Hex values and a color picker.
These buttons can be used for easily shading a mesh. They range from black to white.