Works great on most native Cocoa/Carbon apps. However, when I select a window (any window, regardless of whether it turns grayscale on defocus) the icons on my desktop disappear. While it's not the WORST thing to have to live with, it definitely isn't the most preferable.
Update: If I have a window selected, let's say Chrome for now. If I have Chrome on focus, then click-n-drag on the desktop where my icons are, upon release of the mouse click, the icons appear, the highlight-rectangle flashes then fades away, and then icons are selected. Perhaps there's an overlay that's covering up the icons (but not the wallpaper?)
Finder does crazy shit with a) windows and b) window levels. I probably am not going to fix any bugs in this project, but let me know if you find a solution!