Gray mold is a common disease of small fruits (e.g. strawberries) and flowers (e.g. petunias) in warm, humid weather. It is caused by the fungus Botrytis cinerea, which produces huge numbers of powdery spores.
Botrytis causes a destructive disease of grapes called 'bunch rot,' but it has its good side, too. Under the right environmental conditions (cool nights and sunny, warm afternoons), Botrytis-infected grapes slowly shrink until they resemble raisins. They become sweeter as the natural sugars concentrate and the water content decreases. They take on the distinctive taste of Botrytis. The fungus develops naturally, although spores may be sprayed on the vines to encourage infection.
Once infected by this 'noble rot,' the grapes are used for special wines, particularly dessert wines (golden Sauternes) and Riesling, Semillon, and Sauvignon Blanc. Look for the words 'Botrytis' or 'botrytised' or 'late harvest' on the label. Most wine stores have a special section for these wines.