As I recall, the shade of brown used on the MTH Illinois Central was incorrect - it was too light, like the Lionel Postwar version. Also, of course, the cars are plastic. On the K-Line set, from pictures it appears the brown color is right, although I haven't seen this set in person. Can't tell about the orange and yellow for sure, but it looks good. That would be a nice set to have, if you could ever find one (and had a huge layout to run it on).
I have the Lionel set, and the colors on that are correct. This set has meaning for me because it was the first Lionel aluminum passenger set I ever saw (in a hobby shop in Chicago back in the late 80s) and it really hit me at the time - I thought it was stunning. Also, several of the cars have names with meaning, including the "Memphis" observation car (where we were married -she's from Tennessee). Of course, the City of New Orleans ran through Memphis, and one of the real observation cars used by the Ill. Central on the train was the "Memphis."
I did a little modification to my set, getting another Lionel F-3 A-B-A set with command control and railsounds etc. and swapping shells with the Ill. Central engines. Did a little surgery on the "B" unit to install the speaker, volume control and back-up light. Most of the surgery was actually on the original "B" (a Milwaukee Road), the shell of which had to go into the dump after the surgery. So now I have a City of New Orleans set with TMCC, Railsounds, directional lighting, cab interior and crew, electrocouplers, etc. I also added full interiors with passenger figures to the cars, swapping interiors out from another Lionel aluminum passenger set. The results are a very nice, updated set.