Why is the "Connect" button greyed out when entering the WiFi password for wireless networks?

If the connect button is greyed out, your passphrase does not match the expected encryption standard.

For instance: WPA/2 passworts need to be between 8 and 64 Characters. If you have less characters in your passphrase, the connection Button will not activate.

It may happen that ubuntu does not correctly recognize your routers encryption. In this rare case you should edit your connections security to what your router is set to under Connections -> Wireless -> edit "Your connection" -> Security

You might want to check the permissions in the .config for your local user: chmod -R ug+rw /home/youruser/.config which will give read and write permissions for user and group in your settings directory. Might work with chmod -R u+rw