I was trying to create IK constraint following a Nathan Vegdahl tutorial, and everything was nice and shiny, until I tried to actually move a bone. It's not moving, only rotating. I see that transform lock panel on location is grey and completely locked, and I have no idea what's wrong.
What you see is normal behaviour. A bone is defined by two points, the head and tail (also called root and tip).
When a bone is connected to its parent bone, in pose mode you are unable to move the head, you can only rotate the bone so that its tail is in a different location.
To move the head of the bone you need to rotate its parent bone so that the connecting point is in a different location.
Blender provides user feedback by fading out the location of the bone when you can't directly edit that property using the current selection.