OK just recruited a freshman who had high (green) potential in rebounding and average (black) in speed. After one preseason game his rebounding went to black (average) and speed to red (low). What gives????

Bad luck, it happens.  He was at the low end of high and average potential respectively.

That means they were right on the lower cusp of high and average respectively. High indicates 20+ points of improvement and average indicates 7-20. The actual rating is a decimal number while the number in the player profile page is rounded. So basically your player's ratings had something like 20.1 points and 7.1 points of improvement. They each improved .2 points during the first practice, moving them into the next lower threshold without changing the rounded value on the player page. Its annoying to have that happen, especially with multiple rating on the same player, but rest assured that is not the norm. I usually notice it once every 2 or 3 seasons.

That would be great but he did not improve a single digit in either category it just changed potential color

Yep. it only has to improve in decimal increments to accomplish that. he was borderline high by a fraction. It sucks, but it happens pretty regular, unless you scout trip endlessly until you get the information or until you recruit another player you can get that info on.