No, gray has been out for a few years, but you should decorate based on the fixed elements in the room and your furnishing ... and not based on the latest trend.

I live in an area that has many faux-Mediterranean style houses with Travertine floors and people tried to cram the gray trend into those homes. The awful end result was an interior that had pink (Travertine) and blue (gray) undertones, which did not look good.

I believe color is lighting dependent. Accordingly, white is the safe choice. Ours was well illuminated with the ceiling and most walls painted off-white, then accent color to define individual areas.

I would make sure you have very good lighting in your basement and pick a color for the walls, that will add some interest to the room, rather than a blah gray or white like everyone else has.

I like white walls for basement, but if installing flooring and the uses you have planned let that be your guide.