A reader writes:
If paintball gear is indeed being used for the purpose you describe, it probably isn't that effective or widespread. Marking folks with paintballs has proven to be mostly impractical (unless indelible dye and/or flourescing dye is used, and if the paintballs came from PEVS, it isn't either of those). Paintball guns are also notoriously inaccurate from any decent, stand-off distance (this is why we shoot high volumes - 'accuracy through volume').
Just prior to the elections, Iran hosted an international paintball tournament (PALMS), at which PEVS Paintball had a presence. (An American team won the event.) However, I have no doubt that the folks at PEVS are unaware of how their supplies are allegedly being used against demonstrators.
If the regime does use that tactic, Iranian protestors could counter it fairly easily by obtaining a few paintball guns themselves (my understanding is that the sport is fairly popular over there) and surreptitiously marking everyone and everything - including 'plainclothes' police. I don't know how well that tactic would play out in the real situation going on over there, but it, or some variation of it, would certainly help to confuse the issue.
Also, the regular fill in paintballs washes off fairly easily - a roll of paper towel is sufficient to clean off numerous hits (indeed, some players can wipe off hits during a game, right under the eyes of game officials). And another old tournament tactic - multiple layers of clothing - might also be of use. (Simply pull off the shirt with the hit on it.)
These are called "marker rounds" in the states. They are an extremely popular "crowd control" tactic (for instance, recently in the Twin Cities, where I live and protested during the Republican National Convention last September). They hurt a lot, scar, and maim, but probably won't kill you. They are thus known as "less lethal" weapons.
Update: A third reader responds:
It is not paintball pellets that are being used in the US. The authorities use special marking rounds produced by Defense Technologies/Federal Laboratories.