No terminal colors in Ubuntu Server 12.04

You do not have problems with your terminal or terminal setting. Try this:

ls --color

It works, doesn't it?

Most likely, you have replaced your .bashrc. You can find the original .bashrc, which for example defines the alias ls='ls --color=auto' and also color promtpts in /etc/skel/.

Copy a new .bashrc with:

mv ~/.bashrc ~/.bashrc.old
cp /etc/skel/.bashrc ~/.bashrc