are fruit flies color blind?

Answer 1

No, the fly retina contains three types of photoreceptors with layer-specific connectivity in the brain. This type of connection produces a retinotopic map, a characteristic feature of all complex visual systems. Two receptor cells R7/8 are sensitive in photopic light levels while the third R1-6 dominates response in dim light with UV and blue peaks.
R7 cells express the short-wave sensitive rhodopsin-3 or the long-wave type by expression of rhodopsin-4. Genes expressed in R8 are determined by the adjacent R7 cells controlled by a gene called 'Spineless'.
Dr. Diane Duncan said "We've known for a while that spineless has several sensory functions and we thought it might be a bit underrated in developmental biology. Now we add color vision to its duties." They see with about 70% 'pale' and 30% as 'yellow' and compare the two inputs to create color vision.

Answer 2

There is research indicating that fruit flies (the scientific name is Drosophila melanogaster) are able too tell the difference between yellow and blue. Generally insects have so-called composite eyes so it's very hard too compare their vision with what we see.