As a recidivist sex offender, Grady was court ordered to be subjected to satellite based monitoring for the rest of his life. Basically, he would have to wear a monitor at all times, which would give the state continuous time-stamped information about his location, and alerts if he either wasn't somewhere he needed to be, or was somewhere he wasn't supposed to be.
Grady appealed the decision requiring his monitoring all the way to the Supreme Court. His argument was that if GPS monitoring of someone's car (as in US v. Jones) is a search, then GPS monitoring of their body is also a search. North Carolina's arguments were pretty convoluted... first they held that because the program is civil in nature, this is not a search. Then they argued that because Grady didn't present any evidence that the program obtains information, the courts have no way of knowing whether or not it's a search (both arguments seem almost inconceivably stupid to me).
The Supreme Court held that GPS monitoring of a person is a search, using similar reasoning to what they did in Jones (the GPS monitoring device Grady would be required to wear is essentially a physical intrusion on his property). It doesn't matter if it's a civil process or a criminal investigation... even home inspectors doing inspections are conducting a search which must comply with the Fourth Amendment. It also doesn't matter that Grady didn't do enough to explain the program to the Supreme Court... it's goal of obtaining information is evident both from the name of the program (Satellite Based Monitoring) and from the statute authorizing it.
On the other hand, just because it's a search doesn't mean it's an unreasonable search. Since the state courts never addressed the reasonableness of it, the Supreme Court remanded the case back to the State to consider whether or not the search is reasonable. Kinda like telling them to stop skirting the issue, and make a proper decision.