@Mike Savage The hoods, as I understand, are a sign of penance. Their use started in the middle ages. The idea is that noone will know who the penitent is. This holy week processions are done all over Spain, Interestly enough I don't think this tradition was passed to any of the American countries.
The different colors represent the "cofradias" or associations of penitents who take care and carry the images (The image being carried in this picture is the image of Our Lady of the Sorrows). Notice that penitents on their waist have a rope (cincture) tied with three knots. These represent the tree promises of the penitent chastity, abstinence and obedience (This type of knot is also called the "Franciscan knot" because Franciscans use it in their habits).