A few months ago, James Padolsey introduced a cool greyscale technique for non-IE browsers. His technique inspired SohTanaka to come up with a workaround with a similar effect.
Greyscale Hover Effect with CSS & jQuery relies on CSS Sprites and a few lines of jQuery, but requires a bit of preparation before it can be implemented. It is not recommended for large scale projects and probably best for displaying portfolio pieces.
Requirements: jQuery Framework
License: License Free