Still need to tell eshell it's an emacs term to get bash color.
--- a/init.el	Thu Jul 04 13:46:29 2013 -0500
+++ b/init.el	Fri Jul 05 13:47:47 2013 -0500
@@ -139,6 +139,7 @@
 (global-set-key (kbd "C-c s") 'eshell) ; start shell
 (exec-path-from-shell-initialize)
 (eshell)
+(add-hook 'eshell-mode-hook '(setenv "TERM" "emacs"))
 
 ;;; uniquify
 (setq