Grout comes in 4 basic forms: Sanded, Unsanded, Premixed and Epoxy Based.
Sanded grout is the best all-around choice for most projects. Sand adds to the strength and helps to prevent shrinkage. Sanded grout is intended for joints up to 1/2". Look for polymer fortified versions. We use sanded grout almost exclusively. Note: The sand particles can scratch the surface if delicate glazes and mirrored glass. This can be prevented by careful cleaning with a light hand. You may also tape off these surfaces to protect them until you are finished grouting. Most sanded grouts can be used indoors and out and in moisture-rich conditions. Always follow the manufacturer’s recommendations.
Unsanded grout can ONLY be used for grout joints that are 1/8" or smaller. If the joint is any larger the grout will crack, it may sink, and it is also very difficult to smooth out. Note: if your joints are 1/8" or less you can still use sanded grout.
Premixed grout comes wet with the liquids added and can be used directly from the container. I'll bet you are thinking "ah"! This sounds great!". Remember easier is not always better. Most premixed grout is unsanded and subject to the same problems. It can be difficult to work with and personally, we believe it is never a good choice. With that said new products enter the market every day and there may be some worth researching.
Epoxy grouts can be used where high levels of moisture are present. Most epoxy grouts are waterproof and will withstand the worst conditions. Epoxy-based grouts normally come in multi-part containers that need to be mixed in specific proportions. A hardener, a resin, and sometimes a separate aggregate. Epoxy-based grouts are more difficult to work with, to clean up. We suggest before tackling a prized piece you practice using it and if you work on something where water is an issue you highly consider using one of them.
Currently available are a variety of grouts that have “additives” for additional strength, durability, stain resistance (not stain proof), algae resistance, UV protectants, etc. If you are working on a piece that will be exposed to extreme exterior elements you may wish to consider these products, which do cost more but can save time. For example, if a sealant is added to the grout you can save time sealing each individual grout line post grouting. Read labels and don’t be afraid to contact the manufacturer to get specific recommendations for your project.
Is there a difference between interior and exterior grout? Most outdoor applications call for a sanded grout, which is used for grout joints 1/8 inch or wider. Cement-based grout used outdoors must be rated for "no efflorescence" to ensure that the grout won't effloresce or lose moisture and develop a chalky white residue. Most of the “amped-up” grout products note above are fine. Again, read the labels. Any grout that can be used outside may be used inside but not vise versa.