I manage a team of web developers
at work. I bet them that if the latest site rollout was a success, I would dye
(if the rollout was a failure the lead developer had to dye his hair pink. Thankfully, I lost). Doing this isn't as easy as it sounds, so here's a handy set of instructions in case you ever need to do the same thing.
First off, unless your facial hair is extremely blond to begin with, you'll need to bleach it before you color it. This is so you can achieve a nice bright color. If you color dark hair, it stays pretty dark and doesn't show up well. For this task, I used Loreal's Feria 200 bleach blonding kit. You don't want a blond coloring kit, it has to be a bleaching kit. Look at a drugstore if they don't have a bleaching kit at the grocery store.
It's pretty easy to do the bleaching, just follow the instructions. The only thing I can add is that this part is not a precision operation -- you need to get the stuff on fairly heavily since facial hair is normally thicker than regular hair. It smells pretty bad for the first 5 minutes or so, and you will want to have a newspaper handy to fan fresh air at your face. I left it on 20 minutes and washed it off, but the result wasn't light enough so I did another 20 minute session.
You can skip all the extra steps in the bleaching kit after the lightening part. They include some kind of conditioner but you don't need to go through that if you're just going to color it. Rinse all the bleach gunk out of your beard and make sure it is completely dry before proceeding.
For the color I chose Pretty Flamingo Fudge from Paintbox. This is a super-bright pink color which looks totally unnatural in any circumstances. You can buy Fudge color at most beauty supply stores. Wearing a pair of latex gloves, squirt the color onto your finger and rub it into the hair you want to dye. Let it sit about 30 minutes and rinse it out until the water runs clear.
After that you'll need to get the color off your skin. I let mine set overnight and used a washcloth with soap in the morning to scrub my face. The color comes off your skin fairly easily.
Note: if you don't want to have a hot pink beard, stay away from web developers. They're probably smarter than you, they travel in packs, they stick together and eventually they'll figure out a way to make you look like a complete jackass. Stick to managing used bookstores or something instead. ;)
Update: You can now see a picture of me and my hot pink beard at http://www.hosebeast.com/suave.JPG