Ground coffee by it's nature gives off some of it's flavour and absorbs surrounding air. Using even an inexpensive grinder will produce a superior cup to using preground coffee however inexpensive grinders have their flaws. Blade style grinders "chop" the coffee, they don't grind it, producing an uneven grind and thus uneven results when brewing. Blade style grinders also need to spin much longer to "grind" the coffee thus producing a lot of heat in the coffee altering the taste of the final brew, usually imparting a slight burnt taste.
Burr type grinders are just that, grinders. They utilize a moving burr and a non moving surface against which the beans are crushed producing a consistent grind with almost no heat. The distance between the burr and the non moving surface is what determines the grind size. Most burr grinders are adjustable for grind size. There are two basic designs, a moving wheel or a moving conical burr. The conical burr is the best of the two designs. Burr grinders can be found for as little as $29.
Here's a video courtesy of The Coffee Detective comparing and showing how to use the different types of coffee grinders:
For more information about the conical burr coffee grinder shown in this video, see the Capresso Infinity Burr Grinder.
Additionally we have purchased a Baratza Virtuos burr grinder for use at shows and events. It's a great grinder that we give an A+. It blurs the line between high end commercial grinder and consumer grade coffee grinder. Read our review here.