telcontar, i would say start with some passes with your coarsest stone, to get the chips out and even out the bevel, then polish up to a high grit.
personally, i don't use a steel. i am very paranoid about keeping my kitchen edges in good shape so they rarely contact anything. if they start to get dull i use a 15 micron belt followed by stropping to give a high polished gently convexed edge. this edge lasts for quite a while (2-3 months) before i notice any real drag when cutting. i avoid all ceramic and metals like the plague though, so no cutting on plates, countertops, cookie trays, or anything like that. only nylon and wood cutting boards (which do have a dulling factor, but in this application it is not a huge deal).
if i were going to add a sharpener to the kitchen i would use a large ceramic rod that actually removes a small amount of metal while straightening. in my opinion it will have much more effect and solve the problem instead of just straightening things out. also, removing the metal instead of pushing it around could help you with the chipping problem. a ceramic rod takes off very little metal at a time, so excessive wear shouldn't be a problem at all.