Use fully upgraded bullets of a pulser for the final boss. They do more DPS than the other weapons. I recommend the pulser, and beat the game using it myself.
I don't see why the military is so surprised that they're losing, given that they're apparently being given orders by a 13 year old with a voice modulator and a firmly held belief that he can use the word "freaking" and still be taken seriously.
I've got to disagree with a lot of the comments here, treating the color like it was a good thing. I found it extremely disorienting and annoying. To me, the game says that sometimes you have to suck it up: life's not always about what YOU want. And honestly? What was easier, disobeying this completely d*ckish guy telling you what to do, or sucking it up and taking your blows for once? I hope that some folks share my perspective out there :)