I think the bar outside the ground is for hom fans only... I think away fans were allowed in Harrys bar, but I wouldnt fancy it. As for town, loads of pubs, most of which would be OK during the day - its when it gets dark the local knobs come out...
Lloyds is prob my favourite bar at that end of the high street (with yates and bar me being the worst).
Oh, and I forgot - there is a huge new walkabout on the high street as well - tis a good pub with good atmos. If they let colours in, this could be a good place to start.
The wetherspoons is the far end of the high street (albeit just a 5 minute walk) but is definitely OK with colours (I went drinking in here on our last visit).
To be fair, one thing Watford has lots of, is pubs! It has its share of idiots too, but 99.9% of the fans are cool.