I'm using ubuntu karmic, and get these gray windows too. I use emesene from 
"bjfs" PPA and can't use it with the notifications turned on because it becomes 
unresponsive when some one logs in/out, etc. 
In addition, the notifications look HUGE, take a look at this example (i was 
turning volume up):
http://www.ubuntu-pics.de/bild/36458/pantallazo_01_o80Zu7.jpg

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OSD hangs up applications leading to them greying out
https://bugs.launchpad.net/bugs/347444
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