You can drill it out, remove the grille, then get a vise-grip on the end to pull out.

If it's a nail, you might use some ViseGrips to start getting it out, then a claw hammer (with something under it to prevent damage to the ceiling).

Yep, definitely nailed in place. Some people. :(

To elaborate on Cilantro's and Seabornman's suggestions, definitely start by running a single edge razor blade or mat knife around the grill to break the paint film cleanly. Then use a centerpunch to make a ding in the center of each nail and drill the heads off. Start with a small drill so it stays in the ding, and drill down through the head into the nail. Then re-drill using gradually large sizes until the head comes off. Once you have the grill off, you can wiggle the rest of the nail out with vise-grips.

Presumably you're replacing the grille when you get it removed. It's clear some idiot nailed it in. I would take a pin punch and hammer all the way around the nail head until the grille was depressed enough that the nail heads were standing proud of the surrounding surface, and then I'd use a claw hammer or pry bar to pull out the nails. Finally, I'd use a razor knife and keep cutting through the paint at the perimeter of the grille until you get it loose.

If you try to use a ViseGrip, the nail heads may break off, but then you could again use the razor knife to get the grille free. You could then hammer the remains of the nails flush, and put screw holes in a slightly different location when you mount the new grille.

Thanks for the response. I was hoping that it wasn't a nail, but I will try some vise-grips first.