But it says that you can leave the fields to the right blank to use an internal changer. That's what I did and it seems to work, so what does that mean?
You can check your refresh rate in a number of ways. If you play a video in window mode you can go to your video settings (CCC for ATI or the Nvidia Control Panel for Nvidia) and check what RR it is set to after shifting. If you use Reclock as an audio renderer it is even easier, just click the Reclock icon when playing a video in windowed mode and it will be right there.
As to the reason for the gray picture I can't be sure, but it might be a color space problem. What video card do you use?