I have an image style which has Desaturate and Scale & Crop turned on.
I call it using this:
<a href="<?php print image_style_url('gallery_full', $image['uri']); ?>"><img src="<?php print image_style_url('gallery_thumb_grey', $image['uri']); ?>" /></a>
It outputs the image resized but doesn't desaturate it. There are no errors.