When adding images to my picture in ImageReady and putting a mask over them the colors switch to different shades of gray, but no actual colors. When switching to a different layer it changes back to original color. Is this normal for something to do this when masked?

Yes, as a mask has got nothing todo with colors.

A mask indicates if the underlying pixels must be used or not (black/white mask) or in what degree they must be used (grayscale mask).

Compare a mask with a real mask you can put on your face. If you put a mask on your face with only the eyes and mouth cut out you can take a spraycan and spray all over your face, but only your eyes and mouth will be painted.
(don't try this at home kids )

Now if you put some kind of mesh with small holes in the cut out eyes and spray again with a different color all over your face, you'll notice that the paint will be got thru, but not as much as the first time. This can be compared with a greyscale mask. The bigger the holes in the mesh are (or the more white the mask in your paint program is), the more the underlying color will be used/manipulated.

A layer is simply a part of the total image. A mask can be put into a layer too, but that isn't nessecairly. In certain paint programs masks or used independantly in others they are used as special kinds of layers.

In short: a mask is something to cover stuff up while you're working. Hence why this has got nothing todo with colors and why you wont see any colors either.

Oh, than I must have done something different.

In the above picture it did something that seems like masking but not exactly. I would like to do this again but I don't know how