Do not use mean2 as the variable name - that is a function built in to the Image Processing Toolbox. What happens if you just take it one step at a time, like it's trying to walk you through?
% 1)Select an initial estimate for T
T = 128;
T0 = .5;
% 2)Segment the image using T. This will produce two
% groups of pixels. G1 consisting of all pixels with gray
% level values >T and G2 consisting of pixels with values <=T.
G1 = grayImage > T;
G2 = grayImage <= T;
% 3)Compute the average gray level values mean1 and
% mean2 for the pixels in regions G1 and G2.
meanGL1 = mean(grayImage(G1))
meanGL2 = mean(grayImage(G2))
% 4)Compute a new threshold value
Tnew=(1/2) * (meanGL1 +meanGL2)
if (Tnew - T) < T0
and so on. You just need to put that into a while loop and break when the condition of little change is met. I practically did the whole thing for you. You just have to add 4 lines of code.
