It's no rumor -- there is two-player co-op in Sonic Colors.
The way it's presented ain't too shabby. See, you aren't actually playing as Sonic or one of his furry friends. Instead, you assume control of robotic Sonic copies racing through Eggman-designed simulations, sort of like test runs to see if his devious traps are enough or if he needs to return to the drawing board. Doesn't that just tickle you?
These levels, which are unlocked by collecting secret rings in the main game, offer all the same speed and thrills as the single-player mode with the addition of obstacles requiring teamwork to overcome. You can combine powers, like the drill and laser, to create a souped-up amalgamation, then afterward you can screw each other over as you try to reach the goal first.
Reminds me of New Super Mario Bros. Wii. Could be fun, could be frustrating. We'll know for sure soon.