I recently spent a few days going nuts over the same thing. Here is an example we worked out with Cetin and Nick's help here on the UT:

*--DynamicBackColor Changes in Grids
set safety OFF
set talk OFF
set exact ON
set near OFF
CLOSE TABLES all
CLOSE DATABASES all

CREATE TABLE tpolicy(po_number c(25), po_status c(3), po_name c(20))
APPEND BLANK
REPLACE po_name WITH "John T. Smith"
REPLACE po_number WITH "123456"
REPLACE po_status WITH "CXP"
APPEND BLANK
REPLACE po_name WITH "Sally A. Taylor"
REPLACE po_number WITH "789012"
REPLACE po_status WITH "NB"
APPEND BLANK
REPLACE po_name WITH "Craig Abernathy"
REPLACE po_number WITH "AAB123"
REPLACE po_status WITH "REN"
APPEND BLANK
REPLACE po_name WITH "Chris Johnson"
REPLACE po_number WITH "890123"
REPLACE po_status WITH "AP"
sele 0
CREATE TABLE vstatus (st_status c(3), st_attrib c(16))
APPEND BLANK
REPLACE st_status WITH "CXP"
REPLACE st_attrib WITH "RGB(255,128,192)"
APPEND BLANK
REPLACE st_status WITH "NB"
REPLACE st_attrib WITH "RGB(255,255,0)"
APPEND BLANK
REPLACE st_status WITH "AP"
REPLACE st_attrib WITH "RGB(128,255,255)"

COPY TO ARRAY _vstatus FIELDS ST_STATUS, ST_ATTRIB FOR !EMPTY(ST_STATUS)

SELE tpolicy
GO top

oform = createobj('testform')

oform.show()
oform.SetPolicyGridColor()
oform.refresh()

read events

CLOSE tables ALL
return

DEFINE CLASS testform AS form


   Top = 0
   Left = 0
   Height = 227
   Width = 461
   DoCreate = .T.
   Caption = "Test Highlight Change "
   *-- Specifies the grid's selected row background color.
   highlightbackcolor = .F.
   *-- Specifies whether the selected row is highlighted and also if it remains highlighted when user changes focus to another control on the form.
   highlightstyle = .F.
   gridbackcolor = .F.
   gridforecolor = .F.
   Name = "TESTFORM"


   ADD OBJECT grid1 AS grid WITH ;
      Anchor = 10, ;
      ColumnCount = 3, ;
      Height = 200, ;
      Left = 24, ;
      Panel = 1, ;
      RecordSource = "tpolicy", ;
      RecordSourceType = 1, ;
      Top = 12, ;
      Width = 410, ;
      Themes = .F., ;
      HighlightBackColor = RGB(0,128,192), ;
      HighlightForeColor = RGB(0,0,0), ;
      SelectedItemBackColor = RGB(0,128,192), ;
      SelectedItemForeColor = RGB(0,0,0), ;
      HighlightStyle = 2, ;
      Name = "grid1", ;
      Column1.ControlSource = "tpolicy.po_number", ;
      Column1.Width = 154, ;
      Column1.Name = "Column1", ;
      Column2.ControlSource = "tpolicy.po_status", ;
      Column2.Name = "Column2",;
      Column3.ControlSource = "tpolicy.po_name", ;
      Column3.Width = 154, ;
      Column3.Name = "Column3"


   PROCEDURE setpolicygridcolor
      WITH this.grid1
         FOR nColumnID = 1 TO .columncount
            colorvalue = thisform.getpolicygridcolor(.recordsource,.columns(nColumnID).controlsource)
            .Columns(nColumnID).dynamicbackcolor = colorvalue
            .Columns(nColumnID).Controls[2].BACKCOLOR = THISFORM.HIGHLIGHTBACKCOLOR 
         ENDFOR
      ENDWITH
   ENDPROC


   PROCEDURE getpolicygridcolor
      LPARAMETERS tcolortable, tcolorfield

      EXTERNAL ARRAY _vstatus
      EXTERNAL ARRAY _vtype

      defaultcolorvalue = "RGB(255,255,255)"

      IF EMPTY(tcolortable) .OR. TYPE('tcolortable') <> "C" .OR. !USED(tcolortable)
         RETURN defaultcolorvalue
      ENDIF
      IF TYPE('tcolorfield') <> "C" .OR. EMPTY(tcolorfield)
         RETURN defaultcolorvalue
      ENDIF
      IF AT('.',tcolorfield) > 0
         tcolorfield = SUBSTR(tcolorfield,AT('.',tcolorfield)+1)
      ENDIF

      tcolorfield = UPPER(ALLTRIM(tcolorfield))

      SELECT (tcolortable)

      DO CASE
         CASE tcolorfield = "PO_SUSP"
            RETURN "IIF(!EMPTY(po_status),IIF(ASCAN(_vstatus,po_status)>0,IIF(!EMPTY(_vstatus(ASCAN(_vstatus,po_status)+1)),EVALUATE(_vstatus(ASCAN(_vstatus,po_status)+1)),RGB(255,255,255)),RGB(255,255,255)),RGB(255,255,255))"
         CASE tcolorfield = "PO_STATUS"
            RETURN "IIF(!EMPTY(po_status),IIF(ASCAN(_vstatus,po_status)>0,IIF(!EMPTY(_vstatus(ASCAN(_vstatus,po_status)+1)),EVALUATE(_vstatus(ASCAN(_vstatus,po_status)+1)),RGB(255,255,255)),RGB(255,255,255)),RGB(255,255,255))"
         CASE tcolorfield = "PO_TYPE"
            RETURN "IIF(!EMPTY(po_type),IIF(ASCAN(_vtype,po_type)>0,IIF(!EMPTY(_vtype(ASCAN(_vtype,po_type)+2)),EVALUATE(_vtype(ASCAN(_vtype,po_type)+2)),RGB(255,255,255)),RGB(255,255,255)),RGB(255,255,255))"
      ENDCASE

      RETURN defaultcolorvalue
   ENDPROC


   PROCEDURE highlight_row
      THISFORM.LOCKSCREEN = .T.

      PRIVATE llsethighlight
      llsethighlight = .F.

      WITH THISFORM.grid1

         FOR lnColumn = 1 TO .COLUMNCOUNT

            PRIVATE loCurrentControl
            STORE NULL TO loCurrentControl
            FOR EACH loControl IN .COLUMNS(lnColumn).CONTROLS
               IF loControl.NAME = loControl.PARENT.CURRENTCONTROL
                  loCurrentControl = loControl
               ENDIF
            ENDFOR

            IF TYPE("loCurrentControl") = "O" AND NOT ISNULL(loCurrentControl)
               IF LOWER(loCurrentControl.BASECLASS) = "textbox" .OR. LOWER(loCurrentControl.BASECLASS) = "editbox"
                  IF PEMSTATUS(loCurrentControl, "BackColor", 5 ) && Some controls in the column (i.e. Image) may not have .BackColor Property
               IF EMPTY(.COLUMNS(lnColumn).DYNAMICBACKCOLOR);
                  OR EVALUATE(.COLUMNS(lnColumn).DYNAMICBACKCOLOR) = THISFORM.gridbackcolor
                          .Columns(lnColumn).Sparse = .T.
               ELSE
                        .COLUMNS(lnColumn).SPARSE = .F.
                      *  llsethighlight = .T.   && change the highlightstyle on the grid
                    ENDIF
                  ENDIF
               ENDIF
            ENDIF

         ENDFOR

         IF llsethighlight
         DEBUGOUT "clear"
            .HIGHLIGHTSTYLE = 0   && do not show the highlight - we emulate a highlight
         ELSE
         DEBUGOUT "restore"
            .HIGHLIGHTSTYLE = THISFORM.HIGHLIGHTSTYLE && set the highlight back to the default
         ENDIF

      ENDWITH

      THISFORM.LOCKSCREEN = .F.
   ENDPROC


   PROCEDURE Destroy
      DODEFAULT()
      CLEAR EVENTS
   ENDPROC


   PROCEDURE Init
      DODEFAULT()
      WITH this.grid1
         thisform.highlightbackcolor = .highlightbackcolor
         thisform.highlightstyle     = .highlightstyle
         thisform.gridbackcolor      = .backcolor
         thisform.gridforecolor      = .forecolor
      ENDWITH
      this.highlight_row()
   ENDPROC


   PROCEDURE grid1.AfterRowColChange
      LPARAMETERS nColIndex
      thisform.highlight_row()
   ENDPROC


ENDDEFINE

>I am trying to get this to work. The syntax works in another form, but on this one I keep getting the message "Expression is invalid. Use a valid expression for DYNAMICBACKCOLOR property." The strange this is that if I step through it, I don't get the message, only when it just runs. This code is in the AfterRowColChange event. vSbvPromoDestinations is a view, if that makes a difference. I am trying this because I have a few grids on the form, on one tab I have two grids, the lower being dependent on the upper. When swithcing between them, when I move the record pointer on the upper grid, the view controlling the other grid is requeried and the grid refreshed, but the record marker doesn't move. So I thought I'd get rid of it and use this.
>
>

>WITH This
>	.Tag = STR(RECNO('vSbvPromoDestinations'))
>
>	.SetAll("DynamicBackColor", "IIF(RECNO('vSbvPromoDestinations') = VAL(ALLTRIM(.Tag)), ;
>		RGB(255,255,128), RGB(255,255,255))", "Column")
>
>	.Refresh()
>*.colAirportCode.DynamicBackColor = RGB(0,128,255)
>ENDWITH
>

>
>Please help, it's driving me nuts!
>
>Thanks,
>Dana