Yellow, Green, Red icons with contacts and with sms messages I have seen these icons coming in front of sms messages and in contact list. What they stand for? 

These icons are just like a "clock"
The icon refers to that contact's "availability":


  
  Green: Available. You are online and ready to chat.
  Yellow: Idle. Your status automatically changes to idle when
  you're away from your computer for 15
  minutes. You can't manually select to
  appear idle
  Red: Busy. This lets your contacts know you're busy and don't want to be
  interrupted
  Grey: Signed out of chat, or Invisible. If you set your status to
  Invisible, you'll appear to be signed
  out of chat even when you're actually
  signed in.
  


Source: Google Chat support answer