Both of these cakes are originally from America, if I'm not mistaken. Red Velvet cake is named after its red velvety appearance while Rainbow cake has layers inside according to the colours of the rainbow.
I'm not a food lover so I wasn't that intrigued to try the cakes. After the ques were no longer in sight, I tried the famous rainbow cake made by the The Goods Dept cafe. I must say it was nice, but for a slice which costed me Rp. 60,000 (equal to 3 times lunch at KFC), I think trying it that one time is enough :) Nowadays, almost all cake shops or cafes in Jakarta have these cakes available. But of course, the level of "deliciousness" will be different :)
Source pic: Red Velvet cake http://anakjajan.com/2012/02/13/red-velvet-cake-jakarta/
Source pic: Rainbow cake http://culinarybonanza.blogspot.com/2012/05/lunch-promo-and-rainbow-cake-at-goods.html