This is how my Armageddon colors is set up - hope it helps you.
Room titles plus their exits in striking gold so I know where the shit I am.
Any kind of speech is in that bright blue so I know it's people talking.
Prompt is green when I'm OK but turns red then I'm not.
And loads more of secret fun stuff, too!
If you're asking about why the lines break it's because in your settings you must've had WORDWRAP on. So just uncheck it or click AUTO WORDWRAP or something similar and it should break at where your client is expanded. Sorry I'm not very used to MUSHclient!
Mine's set to a wrap of ~90, cause I like it half like that.