After giving bad or at least incomplete advice over in otakars "Castle Formation" thread
(image section) I prepared some pics to illustrate one correct way of displacing and
coloring a Displaceable Object,kind of compensation so to say.
1.[attachimg=1]
   This is the slightly elongated Cube undisplaced and displaced by a Power Fractal.
2.[attachimg=2]
   
   With Round Radius set to five.
3.[attachimg=3]
   With color added (PF connected to a Surface Layers colour input and on the right
   with  a Transform Input Shader set to use World Space inbetween.)
4.[attachimg=4]
   And at last displacement added (color based and thus applied via a copy of the
   color PF set to white and black again and connected to a Displacement Shader
   that feeds the child input of the Surf.L..It was done like this to get the displ
   to match the colors.On the left: no World Space,no match. On the right: with
   a Transform Input Sh inbetween -> perfect match.)
5.[attachimg=5]
   The nodes.
Hope this will be of use to someone.