The universe is manipulated by the greys. Thus the puppet thing. Captain Spectacular gets too close to the truth of Ziltoid whom the greys are using as a tool for some unknown end. They wipe Spectaculars brain and place him at a starbucks in our dimension. Then there's all the double/triple meanings.

I'm probably giving Dev too much credit

Love this song!

As for the meaning - I always considered it to be a play on 'The Blues', i.e: its a song about how depressed Zillty is over finding out his true nature (wont spoil it for anyone who hasn't listened to this fantastic record yet ).

And as Lolliklauer said; 'The Greys' are a kind of alien...so are the 'greys' the Ziltoidian answer to the 'blues'?

Just my $0.02

If you ignore the entire alien part of the argument, the "greys" are just that: grey, bland, washed-out blah.
And the greys flood our memories, in the long haul - our memories fade over time.

Add that in another layer to the "Greys" relating to aliens as well in context with the whole Ziltoid concept and you get what we already know:
Devin Townsend it a very clever dude.

Salute!

Recently I've wondered if the Grays are pills. It's so simple.