The color or colour between black and white. U.S. spelling has traditionally been gray, and British (or at least modern British) grey. The OED notes:
With regard to the question of usage, an inquiry by Dr. Murray in Nov. 1893 elicited a large number of replies, from which it appeared that in Great Britain the form grey is the more frequent in use, notwithstanding the authority of Johnson and later English lexicographers, who have all given the preference to gray . In answer to questions as to their practice, the printers of The Times stated that they always used the form gray ; Messrs. Spottiswoode and Messrs. Clowes always used grey ; other eminent printing firms had no fixed rule. Many correspondents said that they used the two forms with a difference of meaning or application: the distinction most generally recognized being that grey denotes a more delicate or a lighter tint than gray . Others considered the difference to be that gray is a ‘warmer’ colour, or that it has a mixture of red or brown …. In the twentieth century, grey has become the established spelling in the U.K., whilst gray is standard in the United States.
I would definitely agree with the last statement. The New York Times used gray more than 195,000 times between 1851 and 1980, and grey only 32,255. (The statistics are complicated by the fact that both spellings constitute a common last name.) However, my (American college) students almost unanimously choose grey. I hypothesize that this reflects the popularity of Grey Goose Vodka, designed for the American market and introduced in 1997, and of the TV show “Grey’s Anatomy,” which debuted in 2005. (The book to which the title refers is “Gray’s Anatomy.”)
Visiting the Tomb of the Unknown Soldier on a grey and misty morning, the President told thousands of mourners: “They fell so we might have the freedom, which too many of us take for granted, but at least on this day we know is still our greatest blessing.” (Time, May 29, 1995)/ The hills are shedding their summer gold for their fall grey. (San Jose Mercury News, October 13, 2011)
notoneoffbritishisms.com 
I’ve spelled the word with an “e” by preference for the past fifty-odd years. It simply looks better to me.
Grey is generally used in Irish English too.
Describing it as the colour halfway between black and white seems unduly restrictive, though, since it can be used to describe virtually any point on the scale between those two extremes.
Good point. I have changed the sentence accordingly.
Don’t underestimate the influence of “Gandalf the grey” on that spelling’s adoption in the US.
Along these lines, i ran a little poll a couple of years ago: http://ronebofh.livejournal.com/604252.html
Thanks. I like the comments. There also turns out to be a website devoted to the difference between grey and gray, http://www.greyorgray.com They say:
I don’t like Britishisms in American English but I like “grey”… for eyes only.
I am not a native English speaker and I always went by the rule that it’s ‘grEy’ in England and ‘grAy’ in America – easy to remember! Bad news, then, that it’s not really that simple!
I much prefer grey, but I think it’s selling your students a little short to attribute it to vodka and TV (though they may play a part). As for me, I’ve been spelling it that way at least since high school – before I was aware of the vodka and before Grey’s Anatomy aired. Before I read LotR, too.
For me, at least, grey is more evocative of the color. Maybe it’s slight synesthesia, but there is definitely some feeling for me that grey is slightly cooler and gray is slightly warmer (color-wise), so maybe it makes no sense for me to primarily use grey. I don’t know.
I once got called out once on an internet forum for using “grey” instead of “gray” which made me question whether I’d spelled it right, turns out I did, I’m british and he must have been american, it’s been bothering me ever since, thanks for clearing that up.
It annoys me when I see comments by ignorant people correcting others’ spelling for simply using English spelling. One Youtube video had a user writing in ALL CAPS stating that PLAGIARISE isn’t a word, it’s PLAGIARIZE YOU MORON. Still, this is the norm for Youtube comments, it seems. Incidentally, I’ve never seen this the other way round. It’s always Americans trying to correct the English.
American culture looms so large in the UK that even an uncosmopolitan Brit will be familiar with American spellings (even if they don’t appreciate that the spellings are American, not British). Whereas I would hypothesise it is quite easy for many Americans to be exposed to British spellings so rarely that they assume there is only one spelling.
I’ve seen Youtube commenters trying to “correct” American usage of “soccer” for “association football” hundreds of times. (Even though “soccer” was originally a British word, and used to be widely used in Britain).
I’m sure that’s true, although they aren’t correcting spelling. They are just chauvinistically insisting that everyone should use the term football to mean what it means in Britain.
A Canadian friend of mine took a creative writing course at the University of California. He was gobsmacked that the person leading the seminars criticized (sic, preferred by the OED) his use of Canadian (and British) spellings in words like “colour” and “centre”. And the comment was not simply, “That’s not how we do it in the USA.” It was that his spellings were “wrong” and he’d better change them if he wanted a decent mark.
It’s an astounding piece of provincial jingoism to insist that standard international English is wrong and to insist that only US spellings be used in a creative writing course. Especially in one of the world’s great univesities.
I don’t think it’s chauvinistic, and I don’t mind USanians using ‘football’ in their own country to refer to what is after all their national; game. (I like my baseball: as a Brit I guess I’m a natural Mets fan; but I never got my head round American football, which seems to go for ever with nothing happening for long stretches of time.). It’s not unreasonable though, I think, to gently remind USanians on the Internet that they are in an international medium and for most of the rest of the world, when you say ‘football’ most people will interpret that as Association Football, the most watched and probably the most played sport in the world.
Yes, “soccer” is of English origin, but it came from the Victorian upper classes and you won’t hear it called that at a game in England. Other forms of football exist around the world but are generally called by their qualified names even in their heartlands – Rugby (League and Union), Gaelic, Aussie Rules and so on.
I don’t want to get too sidetracked by this, but I would point out that the example I gave was of YouTube commenters criticizing the use of the word “soccer” for association football, not the use of “football” for American football. And, while “soccer” may be less heard in Britain than it once was, it’s still used in the media and universally understood. Examples include “Soccer Saturday” on Sky Sports, and “World Soccer” magazine (published in London), among others.
On the notion of “grey” and “gray” evoking different shades, I have some thoughts (note that I use the word “evoke”, not “refer to” or “mean”).
If the question is a question about semantics, then the answer is “no” (there is no difference in meaning). If, however, the question is a question about psycholinguistics, then the answer is “you tell me”. One could express this in a flowchart.
Anecdotally, I’ve found that whenever someone claims to perceive a difference, it’s generally the word used in their native dialect which they perceive as referring to the lighter shade, and the other which they perceive as referring to the darker shade. Thus, in my experience, Americans are more likely to perceive gray as lighter than grey, whereas for the British it’s the other way around.
I think the British are self-evidently right, but I’m Australian so I would think that.