Hand tools, especially cutting tools, need to be sharp in order to be effective. Sharp tools are safer, work faster and yield a better cut and finish. Tool sharpening systems usually consist of a stone, sometimes as a wheel, and or a bath to cool the sharpening process. Most hand tools today are not sold as sharp as they should be for maximum effectiveness. This is due, in all likelihood, to a combination of cost, liability, and safety. When sharpening a dull hand tool, be it a chisel blade, knife, saw, or other blade, the idea is to achieve as close to a zero radius intersection as possible. A sharp blade has an edge only a few microns thick!
Good sharpening stones can feature diamond sharpening material, and can be lubricated with either oil or water. Kits that feature an oil or water bath utilize the bath during sharpening to wash away metal filings and to lubricate the fresh surface.
Grinding wheels have long been used to give heavy duty tools (shovels, axes, pick axes etc) a sharp edge. However, the wheel that comes standard on most bench grinders is too hard for proper tool sharpening, and you can easily burn an edge if you are not extremely careful. Norton offers softer grinding wheels specifically made for sharpening, and they are available in medium and fine grits.