Or in the terminal try either:
defaults write com.apple.dock ShowHidden true
or
defaults write com.apple.dock showhidden 1
I'm not sure which one actually has the effect, 'cause I've got 'em both in my dock plist. One or the other will do it.
Also try this for a neat effect:
defaults write com.apple.dock showshadow 1
This puts a neat drop shadow around the Dock. Especially nice if you have the Dock in a top corner (top-left or top-right), like I do.