Ive been using the paper wheels on a bench grinder for sharpening knives for some time, set up like the guy that sharpens knives at the gun show. For those of you that have no idea what I'm talking about, they are 8" X 3/4" slotted wheels made out of laminated paper, one is coated with white glue and sprinkeled with carborendum powder to the point of refusal, the other one is coated with jewlers rouge. Some beeswax is used on the carborendum wheel to keep the heat down. Anyway, I have a lot of chipped and generally messed up carbide lathe bits. The other day I found a guy on ebay selling "diamond powder" all mesh sizes from polishing to grinding (Don't see him on there today). Ordered 2 X 25 carats, about $20.00 ea, of 200 mesh. It took less then one of the packs to coat a new wheel, I guess you need about 20 carats, tried it out last night, sharpens carbide to a sharp polished looking edge, nicer (looking) then new, cool to the touch. Ended up with a 8" X 3/4" diamond sharpening wheel for about $30.00. 200 mesh is a lot more corse then the carborendum medium, if I was going to do another one for knives, I think I would go to 400-600 mesh. Then again, I don't have any carbide knives. 
Al