In most modern shells, you can hit the up and down arrows and it will put, at the prompt, previous commands that you have executed. My question is, how does this work?!
The program does this by printing special characters that the terminal interprets in a special way. The most simple version of this is (on most linux/unix terminals) to print '\r' (carriage return) to the normal stdout which resets the cursor position to the first character in the current line. So the thing you write next will overwrite the line you wrote previously. This can be used for simple progress indicators, for example.
int i = 0;
while (something) {
i++;
printf("\rprocessing line %i...", i);
...
}
But there are more complicated escape characters sequences that are interpreted in various ways. All kinds of things can be done with this, like positioning the cursor at a specific position on the screen or setting the text color. If or how these character sequences are interpreted depends on your terminal, but a common class supported by most terminals are ansi escape sequences. So if you want red text, try:
printf("Text in \033[1;31mred\033[0m\n");