[Andrew Gubb]

I think for Tolkien the colour grey held a special meaning. He used it quite a lot - for instance "mithril" (from his mith- meaning grey), The Grey Havens, The Grey Mountains, The Grey Elves, The Grey Wood, The Grey Company, Lake Mithrim, etc. (Just searched The Lord Of The Rings Wiki for all these examples).

I think Tolkien's particular image of grey was formed by the idea of silver as being grey, hence it was a noble colour. I don't think I ever got the idea of grey meaning in between Good and Evil in his works.

Gandalf was "The Grey" because each wizard of his order had a distinct colour. He later became "The White" because that was Saruman's colour (the highest rank) and Saruman, having fallen from grace, was no longer part of the Council.

There could be symbolism here too I suppose. But I never got the image of Gandalf ever having been "in between". If he had been, I suppose that would have been in his youth, but that's not dealt with in "The Hobbit" or "The Lord Of The Rings".