The particular application I was using it for was a fifo to transfer data across clock domains,where the clocks are non-syncronous which means that the address counts are sampled non-deterministically. the advantage in using grey codes for the input/output address counters is that as there is only ever one bit change and so if only one bit changes you can gaurentee that no incorrect codes get propagated. The address counters are also used to generate the full/half full/empty flags.Multiple bits changing in asyncronous clock domains is just asking for trouble.
There are time advantages as well with grey counters as the decode logic for the next state in the counter state machine is the simplest possible, on a par with one-hot coding.