I have had continuing problems using the Phillips Mobile tool. Besides the gray issue it has not been very stable so I have looked for alternatives.
The tool that worked perfectly was Ringtone Media Studio which....unfortunately isnt free. The upside is that it will allow you to convert 5 files before shutting itself down. In other words, if you have a few specific files you want converted then download the tool at http://www.bvrp.com/ENG/
select the generic phone install and it will work flawlessly without the grey out issue.
If you decide to buy it, its 29.95 and it makes the whole process seamless.