Can't load music on to iphone

Music is supposed to be 'grayed out' unless you are Manually Managing your content (which you are likely doing on your iPod). You can turn that on for your iPhone as well (Summary tab check box), but be aware that all your music/video content will be erased and need to be reloaded.

If you're not manually managing music, to add/delete music you must manage the playlists. Create another playlist and sync that to the phone (check the box on the Music tab) or make a change to an existing playlist that's synced to the phone (add/delete songs) and then sync - your iPhone will be updated accordingly.

Itunes will only let you load music that you have purchased or ripped into itunes. If you're trying to move music on your ipod to your iphone, try the following: launch itunes, connect your iphone, unmount your iphone, but while still in itunes connect your ipod, DO NOT SYNC!, go up to "file", select transfer purchases made on this ipod to this computer, unmount your ipod when finished, connect your iphone & you can then sync your ipod content at that point.