This paper employs a Markov model to study the relative performance of binary and Gray coding in genetic algorithms. The results indicate that while there is not much difference between the two for all possible functions, Gray coding does not necessarily improve performance for functions which have fewer local optima in the Gray representation than in binary.
Uday K. Chakraborty and Cezary Z. Janikow, An analysis of Gray versus binary encoding in genetic search, Information Sciences, Volume 156, Issues 3-4, 15 November 2003, Pages 253-269.
ScienceDirect
Local filename: science3.pdf
Does a fairly heavy theoretical analysis of Gray versus binary coding. May not be too useful (and is hard to understand), but supplies an awful lot of hopefully good references.