A few weeks back I needed to convert some objects in Illustrator CS3 to grayscale, and it took me a while to figure out how to make it happen. Today the issue came up again at work with a co-worker and after I learned she had searched Google without finding an answer, I thought I would post and maybe it would help someone else out.
After initially searching Google for a bit, I noticed everyone was suggesting that the whole document color mode be changed from CMYK or RGB to grayscale, but I only wanted to change a few objects. The solution, which I believe is only in Illustrator CS3, is to select the object or groups on the artboard you want to convert, then under the "Edit" menu choose "Edit Colors" then "Convert to Grayscale". Simple, yes, but hidden in the menus in a very unintuitive spot.
One thing you should be aware of, however, is that doing this removes all the color information from that object/group. This means that any CMYK values will no longer be present. You can, however, always undo the action immediately after converting.