Ultimately I'm looking to create a dashboard for accounts in Red/Yellow/Green criteria based on the trend of rolling 10 week sales. I was easily able to create a text formula field to assign a text value for "Red"/"Yellow"/"Green" and it works great, however it is just boring ole text. Instead I would like to have a picklist automatically populated based on a formula. Since with a the picklist I can control the colors. Is this possible?
If you want to just show the Red, Yellow, Green images based on your picklist of the Red, yellow, green text, then you can use something like this
IF( ISPICKVAL(YourObject.YourTextRicklist__c, "Red"), IMAGE("/resource/yourRedImage.png", "red",32,32), IF( ISPICKVAL(YourObject.YourTextRicklist__c, "Yellow"), IMAGE("/resource/yourYellowImage.png", "yellow",32,32), IMAGE("/resource/yourGreenImage.png", "green",32,32) ) )
To control picklist values based on a formula you just need to set up some workflow rules that fire for the various value and change the picklist as appropriate. Of course, @Dunc44's approach of using an image is the standard for doing this sort of ratings change.