I received this strange puzzle from a seller who told me he can't understand how to play it. The rules on the back are indeed one of the most confusing possible. They mention "instructions" of 4 types cluing about the colors, but there are no any concrete instructions included.
The only mentioning of this strange puzzle on internet seems to be a flickr photo by Beth Cato and her page is full of frustration too. :)
I supposed that this puzzle was possibly created to arrange IQ tests, but the clue sheets were lost somewhere, so I made some extra web searches and was able to find the shareware game Logic Squares for Pocket PCs. It seems to be the same puzzle (just Brown and Pink are replaced with Gray and Cyan), but this time it finally comes complete with randomly generated clues.
Pocket PC is not something I have (I don't have any PC with Windows either) and I usually don't touch shareware games. So my only source for reverse engineering is this screenshot. And one clue seems to be missing on it for a unique solution, for example "Red is not top left".
This seems like a pretty simple game, simpler than Sudoku. But still it can be ok for a child. Please write me if you have any additional info about this puzzle.
Update: I received a hint that somebody bought many of these one-dollar puzzles and gave them on the IPP-29 puzzle exchange in 2009. Then I was able to find that the puzzle was presented as "Shades of Donuts" by Bill Darrah, after he created the set of 60 cards, one per a challenge. This is mentioned, for example, by Neil Hutchison, who made this picture:
One day I can possibly finish my Play IQ Logic Puzzle page that can generate a new game (with new clues) every time. But I am not sure how far I want to go at spending my time on this puzzle.