I'm just a beginner in French, but here's how I understand it: "Il est rouge." is correct because rouge is an adjective describing a thing/person. "C'est du pain" is correct because du pain is a modified noun. I still get the usage of c'est and il est confused myself, but this link is helping me improve: http://french.about.com/library/weekly/aa032500.htm

1A) C'est rouge. → Correct, "It's red." 1B) Ils sont rouge. → Wrong, "rouge" is singular, "ils" is plural so they can't be used together. 1C) Il est rouge. → Correct, "He is red." 2A) C'est du pain. → Correct, "It's bread." 2B) Ils sont du pain. → Grammatically correct but improbable, "They are bread." 2C) Il est du pain. → Grammatically correct but improbable, "He is bread."