rasmusw: np man. Would love to see you test it out on that demon of yours.
summonevil: ty!
moonlitmaverick: np. Yeah, there is quite a difference between bpr and best render. The above images and most of the settings are done with best render as I can preview the lights real time and it renders out better as a single shot. The light is just the default light set really high with rays set from 2-5 or so and aperature to 40. Just play around with it and move it around to find some good shadow angles.
You can achieve that crayon look by going over your model with a rough brush. That is just as important as the material, because the material alone will not achieve that effect. I used the clay buildup brush, sharp square alpha, a small draw size, and a very light touch and just really worked the surface like I would a pencil/crayon/whatever.
Check out the youtube vids I posted on the first page. http://www.youtube.com/watch?v=7F8lhd45O7c Around the 2:30 min mark I do what I think you are looking for.
I would suggest using a sphere with a high poly count to play around with different brushes/alphas/strokes to get a feel for it. Treat the separation and banding of colors like pools of paint that you have to drag your brush stroke through to draw the color along. You can also do this on a layer so you have the option to turn it off or adjust it later.
small_orange_diamond
Gets me thinking about doing a version of him.