The colour palette
In draw mode, tap the palette to open the colour selector.
The palette is comprised of a large wheel of colour wells, a large central "current colour" indicator, and at the bottom two colour adjustment reticles.
Colour Wells
Tap on a colour well to select that colour. If you tap quickly, the colour will be selected and you will return to the drawing immediately.
If you tap and hold, that well will be selected and highlighted in blue. You can then change the colour in that well by using the adjusters.
Colour adjusters
The adjusters are the two reticles at the bottom. Place your finger on a reticle and drag to change the colour.
The left reticle changes hue and saturation without changing value (brightness).
The right reticle changes value and saturation without changing hue.
Colour blending (version 2.7)
The inner wheel of the colour wheel can be used as a colour blender. To turn the blender on, access the Tool Options menu in the gear icon while editing a page.
When Inner ring blend is on and you change any colour in the inner ring, that change will be blended with other colours in the ring from left to right.