Separate prepared batter into small bowls. You should have 6-8 bowls full of batter.
Mix 10-12 drops of food coloring into 1 small bowl of batter. Mix thoroughly to blend color. Repeat with the different bowls, creating different colors.
Grease rectangular cake pan. Pour 1 bowl full of batter into corner of the pan, Taking next bowl full, pour next to the first color. Continue with additional colors until bottom of pan is covered.
Repeat the above process with the second layer. Don't worry about the colors mixing. As long as you simply pour the batter on top of, or next to the other color, it will be okay.
When finished, cook cake according to box directions. When done, cool thoroughly.
FOR FROSTING: Make the instant pudding only using half as much milk as called for. Place in refrigerator until set. The pudding will be very thick. Fold in Cool Whip and blend well. Spread over cooled cake.