How to remove grayed out unknown login item Snow Leopard

You can try editing the following plist file directly:

/Users/YOUR_USERNAME/Library/Preferences/com.apple.loginitems.plist

You will need to use Property List Editor to open this plist file, then you should be able to delete the item which corresponds to the grayed out item.

There's a posibility that it's located in the Managed Preferences folder.

Look under /Library/Managed Preferences/USERNAME/loginwindow.plist

First of all, on the nature of this "UNKNOWN". One of the places where OS keeps a record of login items is loginwindow.plist. The items are stored in a dictionary as name/kind/path values. If one of the applications adds an item not following the pattern it's displayed as "UNKNOWN".

Most probably this record came from network user account software (Active Directory or similar). You can open /Library/Managed Preferences/your-user-name/loginwindow.plist to double check (XCode or TextWrangler can do that). Under AutoLaunchedApplicationDictionary you should see a list of login items. If one of them doesn't follow name/kind/path structure it will be displayed as UNKNOWN. In my case, I have the following:

<dict>
    <key>AuthenticateAsLoginUserShortName</key>
    <true/>
    <key>MCX-NetworkHomeDirectoryItem</key>
    <true/>
</dict>

For a network user account it's impossible to get rid of "UNKNOWN" login item, as loginwindow.plist is created anew on each login.