how to take backup from ipad to i tune library ?

You can copy your purchases from your iPad to your computer's iTunes library via the File > Devices > Transfer Purchases menu option (downloads aren't included in a backup, a restore picks them up from your iTunes library) - if you are using a PC then control-B should get the menus to show if they aren't already. You can take a backup for File > Devices > Back Up

Backups and restores : http://support.apple.com/kb/HT4079

My backup button is greyed out and nothing happens when I hit it.

This is the button on the device's Summary tab ? This seems to have worked for Macs for some people : Re: Greyed out Back up button on itunes