Don't grep, but filter terminal output and colour certain lines (and print all other lines too)

Ruby:

acoc source with dependency of term-ansicolor gem.

Perl:

tail -f /some/log | perl -MTerm::ANSIColor -ne'print color("red") if /error/i; print $_; print color("reset");'

or

tail -f /some/log | perl -MTerm::ANSIColor -pne's/foo/color("cyan")."foo".color("reset")/e;'

or

tail -f /some/log | perl -MTerm::ANSIColor -pne's/(error|bar)/color("green").$1.color("reset")/eig;'

Bash:

Emacs font-lock-keywords can easily be implemented in a 3 line bash script. Call it "highlight":

    # Usage: tail -f error.log | highlight "error"
    RED="$(tput setaf 1)"
    RESET="$(tput setaf 7)"
    sed "s/$1/$RED$1$RESET/"