Hi Sscott,
On the stitching groover, I always get the best results with the leather dry. If I recall correctly, Leather Factory sells two different groovers. One is a real lightweight affair with a set screw in it, never been able to cut a decent stitching groove with one of these. The other is a bit heavier with a collar that screws down to retain the bit/blade. The heavier one is a pretty good tool (made by IVAN-Taiwan). Whichever one you have, the blade must be sharp like any other cutting tool. I always strop mine before I start cutting any stitching grooves, using a pair of vice grip pliers to get a good grip on the naked bit. Just strop on your rouge board in the opposite of the direction you would drag it to cut, until you have a nice polished edge right up to the hole.
Even though you are only removing a small bit of leather, it still has to be very sharp for it to cut a clean line with any control.
Happy Trails,
J