Do I need to do something in order to make the effects and other portions of Audacity that are grayed out usable?
Yes. Select some audio.
Koz
Thanks Koz. I had just gone back and experimented and was just returning to say that I figured it out. 
I have had Audicity for almost a year, and never could get the effects un-greyed… I read KOZs answer, and chose a song, but still greyed out…I have tried it while playing audio, every thing I can think of but to no avail… Please not to techinal…I am using
the 1.2.6 version with WIN XP and a Creative Sound card… It didnt work before the Creative Sound Card…I would like to hear some more bass,and a touch of reverb at times… Thanks Marsh in Connecticut…
Just to clarify, by “select some audio” Kozikowski means click and drag to select a section of the audio track or use one of the Edit-Select options to make the effects menu available. He didn’t mean simply opening a file, as your post implied. Also, effects are not available while Audacity is in Play or Pause mode.
Had a similar problem even though I HAD selected some audio. Turns out that the track can’t be in “pause” mode. Hit stop and the effects got un-grayed. Hope this helps someone.
Possibly a bit late, given that you are replying to a post that is over 5 years old 
but yes you are correct - most of Audacity’s options are not available (greyed out) while playing, recording or paused. Most commands require that playback is stopped.
Just started learning today and ran into the same problem when trying to use a Fade-out effect. I also noticed options in other menus greyed out so I figured the track was in a state that disabled those options. I quickly noticed that I had left the track in pause. Clicking the Stop button activated all the options again. Wish the video tutorials for beginners mentioned that at the beginning. 
As you can see from the earlier posts in this thread this has been a long-standing bear-trap for users to fall into. I still sometimes fall in and I’ve been using Audacity for many years now.
I would prefer it if Audacity just ignored the fact that Audacity was in Pause state and acted as though the user had pressed Stop instead and went ahead and just made the edit that the user requested.
There is a formal proposal for this on the Audacity Wiki: http://wiki.audacityteam.org/wiki/Proposal_Action_edits_when_in_Pause_mode
I have been discussing this with one of the developers recently so there is some chance that this may happen one way or another - but probably not in the next release as that particular developer is very busy doing other stuff.
WC
We don’t provide any of those video tutorials - it would be far too much work for our very small documentation team to maintain and update those.
Most of those videos are using well out of date versions of Audacity and can thus be misleading - many are plain wrong.
You will learn better by following the written tutorials in out User Manual.
Link for the Manual: Audacity Manual
Top Tip: scroll up on the webpage from the link above (or click this link Audacity Manual) and you will see an image of an Audacity project - you can click on places in this image to drill down and explore aspects of Audacity functionality.
WC
Thanks WC for your replies. I will follow your advice re the tutorials. 
I’ve been browsing the manual a lot lately and hadn’t discovered that one yet. Good old image maps…
Thanks for the tip!
You have to thank Bill Wharrie for that - it’s known internally among Audacity Team as “Bill’s-amazing-image-map” 
As a documenter I find myself using that main page image map an awful lot - a very useful tool.
The developers were totally amazed when I showed it to the at our AU14 Audacity Unconference last summer.
There are a few other image maps scattered around in odd places - this one for example: Audacity Manual
You can normally see if a page has image maps as when you hover over the images the cursor changes to the pointing finger hand. For images without image maps we kill the links and all you get is hover text and the arrow cursor.
WC