Agreed with crispain, grey wifi @ iPhone 2G / 3G / 3GS mostly hardware problem. very number case 2G grey wifi i can repaired with swifi.
Actually grey wifi @ iPhone (any) could be :
1. Wifi chip problem (mostly)
2. Baseband corrupted (small case)
a. Reflash baseband.
- for 2G : reflash with bootneuter / sgold.wifi
- 3G / 3GS : reflash with update f/w (baseband) or reflash manually
(take out the chip & reprogramming the NOR flash) - h/w expert only.
b. Broken NOR flash
- replace the NOR flash.
3. Board Problem
- repair the board / could permanently wifi died (no solution) - h/w expert only.

