Re: oil vs water stones
When you acquire a used stone, the best way to tell if it's a waterstone or oilstone is to put a few drops on water on it. If it soaks in, it's a waterstone. If it beads up, it's an oilstone. I know that's a big generalization, but it mostly works.
As far as preference goes, I don't really have one. I use a combination of diamond stones, waterstones, oilstones, Scary Sharp (tm), and leather strops. Usually whatever happens to be on top of the sharpening pile at the time. Also depends on how the steel reacts. Sometimes you try one abrasive, and it's too slow, so you try another one.
who recently got a hard felt wheel (BD gift) so I have another option now...
Wood Hoarder, Blade Sharpener, and Occasional Tool User