If you have OSX tiger simply grab the fileutils from fink with
fink install fileutils
Then add the following to your .profile:
export LS_OPTIONS='--color=auto'
eval "`/sw/bin/dircolors`"
alias ls='ls $LS_OPTIONS'
alias ll='ls $LS_OPTIONS -lah'
alias l='ls $LS_OPTIONS -lA'
In leopard it's even easier; simply use the -G switch:
alias ls='ls -G'
alias ll='ls -lahG'
alias l='ls -laG'
Completely non-essential but I find it quite handy to be able to tell apart dirs and files by colour.