They're still calling the color display "e-paper", which in the case of the original Pebble meant a Sharp Memory LCD display (which, while a high-contrast LCD, looked nothing like the e-ink displays in e-readers.)
Based on the appearance of the display, it looks a lot like the color transflective displays found on older portable Nintendo game systems, so I'm guessing it's relative of those.
That's what it looked like to me as well. Here's an example[1]. These displays can be either back lit or front lit and don't get washed out in sunlight.
Based on the appearance of the display, it looks a lot like the color transflective displays found on older portable Nintendo game systems, so I'm guessing it's relative of those.