I haven't bought a grinder for years, but bigger is better, in my opinion. A smaller one will burn out or break down after your use of it exceeds it's ability to keep up. Consult your local stained glass supplier, but keep in mind what I have said about this, too, when making your decision. As with the soldering iron, a long career in stained glass will surely require you to buy another one later on, and you could buy a smaller one at first and a larger one later on.

Update 2012 - I bought my most recent grinder on Craigslist from a hobbyist who was no longer pursuing stained glass. I paid about $100 dollars below the current list price, and both he and I were happy.

When I first had a small grinder and then bought a second, bigger one, I used the big one for my 1" and 1/4" bits (the smaller bit goes on top of the spindle that holds the larger bit), but I also kept the smaller grinder at my grinding station with a 1/8" bit on it, and thus I never had to remove the 1/4" bit when I wanted to use the 1/8" bit in a few places.

These days, I get along with the 1/4" bit as my smallest bit, and simply never design in anything that would need the 1/8" bit. Even inside points can look perfect when ground no tighter than the 1/4" bit can do. This is done by removing a tiny bit of the heart of the lead cames where the leads meet at the inside point so that they can slide in fully to the mitered point. This is explained better somewhere in the chapters concerning lead in my dvds.

Overall, you cannot go wrong with a larger grinder, except if you have not yet decided whether you will continue to work in stained glass and want to spend less until you've reached that decision point.