Banners are ment to be different colors but in menu and when placed are white wool.

Cannot Reproduce
See screenshot:
http://i.imgur.com/cEKgEfD.png

Tried restarting Minecraft 14w32a but still comes up with this. (See second picture)

Please post it with the F3 screen open.

As you requested, with the f3 menu.

Your Java version is out of date! Please update your Java to the latest version (1.8.0_11): http://www.oracle.com/technetwork/java/javase/downloads/jre8-downloads-2133155.html.*
Download the version correct for your system. If you cannot tell whether your system is 32-bit or 64-bit, please use this page to determine which of both it is: http://windows.microsoft.com/en-us/windows/32-bit-and-64-bit-windows
Please report if the issue persists with the latest Java version.

Ok, Thanks Galaxy_2Alex