Remember, use your grinding belts like they were free. It will pay off in better knives.
Mike truer words were never spoken! If there's anything I have to fight, that is it. I have found the better belts are worth every penny, and using fresh belts frequently just makes everything so much better! So I figure the abrasive cost for any given knife is about $25. Just price it in or give it away knowing it's part of the dues I'm paying.
As to grinder - I'm just like Higgy - I use a BIII now and my next one (you didn't think you only needed
one grinder did you?

) will be a KMG. Go check out
Rob's website and wear a bib because you'll be drooling almost immediately with true, absolute, driving need. I figure since you're making knives you must also be a tool junkie...
I will also second Steve's comment to buy variable speed - don't even consider buying a single speed machine. If necessary you can use a pulley system to adjust the speed of your belts, but make sure you accommodate that up front. I am speaking from experience.
And let me also just mention one more "rule" of grinders: You can't have too much power. My BIII is 1.5 hp and I now wish I'd gone for the 3 hp. I never thought I'd be able to stall 1.5 hp but tapering tangs I really have to be careful not to throw the overload - it'd be nice to be able to just hog it off!

My next grinder is going to up to the job!
You'll have to make a decision about a contact wheel, there are a lot of "discussions" around 8" or 10". I have a 10" and wish it were at least 14". Mine is serrated, I wish it were smooth. The serrated wheels help hog off steel and are great for profiling and rough grinding but they make getting a good finish harder. You'll also want a flat platen; consider facing it with pyroceram (do a search, Steve Pryor is a great guy) or hardened steel. Also check out Steve Sando's recent info on various other things he faces his platen with - a wealth of good ideas!
Okay one last word - buy a metal cutting bandsaw, and do it as soon as you can. There are some things you just wouldn't do if you didn't have a metal cutting band saw. Harbor Freight sells one most of us use and it's about $150 often on sale. If I had to put powered tools in order of their importance for making knives, I'd say it goes Drill Press, Grinder, Band Saw. Of course this might generate some lively discussion - he he!
Reading back through this I noticed that I've made the assumption you're just starting out - that isn't necessarily true and I apologize right now for my preachiness. You can love me or hate me for it, but you can't beat it out of me; they've tried for years.
Welcome to Shop Talk, you're gonna have a blast!
Dave