I'm for German/Allied without color distinction.
You should know who is your ennemy, and if you don't, then luckily the system does not allow you to shoot at your wingmen, but it could... if it was to add "realism"...
The drawback is that you are more prone to errors if you do not pay attention, but I see this more as an advantage since you should do pay attention to the tactical situation

Well, since the system does not let us shoot our friends by accident, I do not see much more realism involved by making it slower to get oriented. If a person is only playing a few games and/or has lots of time to think about things, it does not matter. Some of us have a lot of active games and find only a few stray minutes to check on and update our turns. And, as I said before, many players will play on either side from one game to the next. Anything which makes this process slower is not a good thing. The people who only play Snipes and SS D3/4s can probably find their one plane against however many pidgeons easily. But those of us fighting along in common planes and many scenarios can use all the help we can get.