The wheels you're most likely to encounter are vitrified bond. Glass. They lend themselves best to the type of grinding we do in the shop. There are other bonds, one permitting surface speeds near 10,000 fpm, but they are usually beyond the scope of off hand grinding and are not likely to be found in the home shop, aside from parting wheels. Water will not affect them, otherwise they would not be suited to the work for which they're intended. The typical pedestal or bench grinder isn't water cooled, but almost all grinding machines are, the exceptions being some small surface grinders, and the majority of manual cutter grinders. Grinding dry is wise for cutter grinding, but I've yet to see a job done on a surface grinder that wouldn't be better served wet than dry. Heat is a serious problem when trying to hold a tight tolerance, or to establish a flat surface.
Harold