Colored people meant was the term used for blacks back then in the US. Before the term African American came about. Or it was possibly used for other minorities as well, but I'm not too sure.
Yeah I think it could be used to refer to anyone who wasn't white. I think its actually considered rude now to use in modern parlance? I suppose that depends on where you are from, I have heard elderly black men/women refer to themselves as "colored people" without a hint of irony.

I think its mostly a generational change in preferance?

Hmm, come to think of it, Africian-American could be kind of insulting to some people. We don't usually call say, a Polish or German person a "European-American" do we? How come in "P.C." terminology white people are refered to by their former individual ethnicity and not their continental one, while black people are all refered to by their continental one and not their regional one. How come we don't call people like, Sudanese-American or Congolese-American, et cetera?

Is an arab egyptian an african-american? I mean, Egypt is right there on the continent

Would Charlize Theron be an africian american (assuming she had american citizenship)? She was born and raised in south africa ><

Confusing huh??