What heat should I use to BBQ red/green bell peppers?
Roasting

I use direct heat, medium-high to high, specifically I use my grill but I've seen people set them directly on a gas stove burner (this seems like a fire hazard, so don't walk away).  You could also broil them very close to the broiler, or roast them, but roasting will take longer than direct heat methods.

To easily peel them, you want to go until they're as black as possible.  The blacker, the easier they are to peel.  On my propane grill on medium-high flame, this takes about 4 minutes per side, my grill burns a little hot so you might need 5-6 minutes per side depending on how your grill works.  edit: I also keep the lid closed so the flame climbs a bit more, especially important on a windy day.

You can find a picture on the top of this page, I actually let mine get significantly darker than that, but it's not required.

There are some great general roasting tips in this thread as well as peeling tips in this one.

Grilling

For grilling peppers, instead of keeping them whole, seed them and then cut them into quarters and lightly coat them with a little oil.  I still use a higher, direct heat, but I flip the peppers more often so they will char a little without completely blackening.  Since you're just going for a light char, this will take a little less time than roasted peppers would, about 8 minutes compared to 12.

There is a good step by step guide with pictures here.