The setup of the automatic colorcoding of your activities is pretty simple. You click the icon of the add-on, choose the criteria you want to base the coloring on click the Settings... button.
The Settings window will display the different items to colorcode based on your previous selection. Double-click them to assign each item a color. That's it!
If you want to colorcode the existing activities, go to ColorCode>Existing Activities....
See this video for more details: