If you are using v2009.2, there's a new property on the grid just for this purpose.You can simply set ActiveAppearancesEnabled to false on the Override object. So typically, you would do something like this:

        private void ultraGrid1_InitializeLayout(object sender, Infragistics.Win.UltraWinGrid.InitializeLayoutEventArgs e)
        {
            e.Layout.Override.ActiveAppearancesEnabled = DefaultableBoolean.False;
        }

In any older version of the grid, this is much harder. You would either have to modify the isl or else use a DrawFilter.