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There is only one thing every espresso expert agrees on: The grinder is the single most important piece of coffee equipment you'll buy, and the last place you'd want to skimp. This has a simple reason—the coffee grind is both the most critical and the weakest link in espresso making. It is critical, since unlike regular brewing, the grinder adjustment determines both the espresso's extraction rate and it's brewing time. The grinder is the weakest link because ground coffee is anything but uniform.
When brewing, there's two time factors—the amount of time the coffee should brew, and the amount of time it does brew. The grind fineness determines how long it should brew—the finer the grind, the faster the proper brew time. Less brew time is better when the grind is finer because more surface area is in contact with the water and the coffee solubles dissolve more quickly. But for most brewing methods, the amount of time it does brew is determined by you since you can choose to pour through the filter faster or slower, let the French press brew longer or shorter, etc. This means for non-espresso preparation, you can stick to one grind and pick a brewing time to match.
In espresso, the grind fineness also determines the brewing time, but does so in the opposite direction from the time it should brew. The finer the grind, the more the coffee puck resists the flow, and the longer it takes to brew the same amount of espresso. But the finer the grind, the quicker the coffee solubles extract. In other words, there is only one correct grind setting that gets just the correct timing, and even small deviations screws it up, giving you either an over or underextracted espresso. In practice, good baristas will frequently make minute adjustments to the grind to keep it at the sweet spot as beans age, and ambient conditions change.
Experience shows that the correct timing for espresso is brewing one ounce singles or two ounce doubles in about 25 to 30 seconds; grind fineness should be selected to produce this volume in this time. There are a few things the barista can do to compensate for a slightly off grind, which I'll discuss later in the Mano section. But these tricks are limited; in practice one needs a grinder with lots of available settings.
Many home grinders only have 10 to 20 settings over the entire range from fine to coarse. This translates to about 2 to 4 settings in the espresso range, which is not enough to get the grind right. An espresso grinder either needs a stepless adjustment, or at least 40 settings over the entire range in order to work well.
In theory, if all the ground coffee had the same particle size, it would all brew at the same rate and you could get a perfect extraction. If the grind size is not uniform, the smaller particles overextract, the larger ones underextract, and the result is less than perfect. Unfortunately, coffee is brittle and shatters as it is ground. So even the best contemporary grinders produce a wide distribution of particle sizes. Moreover, some size variation is required for the mechanics of the espresso puck. If all the particles had the same size, there would be large gaps in the coffee puck, and the pressurized water would gush through. A wide distribution of sizes creates a dense pack that resists the flow and allows proper extraction. This is probably the reason why high grown coffees don't do well as espresso since their fines (smallest, dust like grind particles) create a very acrid taste.
The very best grinders are commercial conical burr grinders. These produce elongated particles which pack well, and fewer fines. They are currently very expensive and beyond the reach of almost all home espresso enthusiasts.
Commercial flat burr grinders are nearly as good, although they produce slightly more fines and a more metallic taste with high grown coffees. However, smaller models are only one-third to one-quarter the price of commercial conical burr grinders, and they include some packaged specifically for home use. These run from about $250 to $500 and are recommended for anybody serious about espresso.
Mazzer flat burrs with sharp deep ridges (l) versus Fake flat burrs with knobs that crush beans (r)
There are several manufacturers of home conical grinders. These models work very well for brewed coffee, and some models have enough grind settings to work fairly well for espresso. However, the taste won't be as good as a commercial grinder's. They have lower power motors, plastic gears and lighter duty burr mounts; so the burrs wobble and vary in speed slightly during the grind. Espresso particle size is measured in the 1/1000ths of inches, so even a little wobble and speed change degrades grind quality. Nonetheless, such grinders are a decent economy choice and cost around $150.
Solis conical burrs mounted on soft plastic (l) versus Innova conical burrs mounted on hard resin (r)
Finally there are contraptions falsely called burr grinders that cost around $50. These are not actually burr grinders, but use knobs to crush the beans. Since this produces a large quantity of fines, they will produce an acrid shot with even the most mild mannered all-Brasil blends. They are to be strictly avoided for any coffee use. Whirling blade grinders (that look like tiny blenders or food processors) are also to be avoided, since they too produce excessive dust.
There are non-coffee factors to grinder design that affect their cost. In general, grinders which do a good job but are less expensive tend to be slower, noisier, and messier. It is up to each person to weigh their priorities in economy versus lack of annoyances.
It seems fairly clear to me that any fundamental innovation in espresso will require improvements in grinding coffee. However, the problems are great, so this is an area where technology moves slowly. In the mean time, the existing technological deficiencies in grinder design means that one has to buy the best grinder possible to get decent performance.