If I put the festiwal outift on my pet, will it change it's color genes? for ex. if I put it on the striped black dragon, will it still be stripped black or different? could I still submit him into quests that require pet to be stripped black, or not?

The genes should be the same as before, it only says a different color at the Stats from your pet. Is behaviors the same as Rainbow jars.

In other words, you just decorate you pet and don't change the genes from it ;)

Edit: well actualy I don't know if this still count for the quests, it might be that the stats will be the important part. I heard from Capra recently that she coul not send her pet to one quest  even though the pet had the genes she needed :<
 

No, it will act similar to a Custom Skin and it will not affect the pets genes. It will only alter the image that is shown. I think your pet should still be able to complete quests as these look at the animals genes as long as your pet meets all criteria and is not busy.

Edit: NINJA'D!! :P