The most common abrasive in grinding wheels is alumina (aluminium oxide), and the wheels made of this are most commonly white, sometimes pink, and possibly other colours. This is fine for grinding steel as alumina is harder than steel.
It is not though hard enough for grinding tungsten carbide. The only commonly available materials for grinding this are silicon carbide and diamond. Green grit wheels are silicon carbide in a soft matrix. They do grind tugsten carbide, but slowly and with rapid wheel wear; they are really old hat, and diamond wheels are cheap enough, longer lasting and faster working.
Stick to alumina wheels for HSS and diamond wheels for tungsten carbide. You supplier should be able to guide you as to the best grade, but a middling grade alumina in a vitreous medium should be fine.
I don't know what the grey wheel signifies, you need to get him to be more precise. If it really is grey I doubt it is silicon carbide, but he must be able to tell you precisely what it is – he has no business to be selling grinding wheels if he can't.
David
Edit – DC's post appeared while I was composing this – he has asked the most sensible question of all!
Edited By David Littlewood on 10/08/2012 18:05:44