Yeah, in retrospect that is probably the best approach. Especially since most other "chameleon-like" creatures handle it with a racial bonus on Hide checks.
Updated.
Currently, it's got the standard unicorn's skills and feats (with a +8 racial bonus on Hide checks added). Do we want to shift some actual ranks to Hide?
Do Alertness and Skill Focus (Survival) still seem a good fit, or shall we change one or both of them?
Challenge Rating: x
Advancement: 5–8 HD (Medium)?
A typical adult faerie unicorn grows to x feet in length, stands 2 to 3 feet high at the shoulder, and weighs x pounds. Females are slightly smaller and slimmer than males.
Also reminds me a bit of fire shield. Combine the two, perhaps, taking the aura of retribution but limiting it to melee attacks?
Want to change up the standard SLAs any?