I agree with both the posts above, but I will add a few specific examples. Developers that contain solvent chemicals reduce the apparent grain by physically dissolving the edges of the grain, but this solvent action reduces apparent sharpness. The primary solvent chemical in most developers is sodium sulfite. Sodium sulfite has many beneficial effects (other than dissolving the grain), which is why most developers contain at least some of it in their formula.(posted 8195 days ago)Developers with fairly high amounts of sodium sulfite include D-76, XTOL, and Microdol-X (and the equivalent formulas from Ilford and others). When used as a straight stock solution (undiluted) these developers have a definite grain reducing and sharpness reducing effect. When used 1:3 dilution, the percentage of sodium sulfite is reduced and there is much less effect on grain or sharpness other than what is inherent in the film. Intermediate dilutions such as 1:1 or 1:2 are often used as a compromise.
Developers such as HC-110 and Rodinal have little or no sodium sulfite (depending on who you ask) and are considered to be among the best for obtaining the sharpest looking negatives. However, Rodinal is also fairly high in alkalinity, which has a tendency to cause grain clumping, which is perceived as an increase in grain (as opposed to merely grain neutral). But when Rodinal is highly diluted (1:50 or above dilutions) the alkalinity is reduced and the grain clumping is significantly reduced.
When used in higher dilutions, Rodinal has a somewhat compensating effect (contrast reducing), has excellent sharpness, and has a minimal grain clumping tendencies. When using Rodinal, it is important to observe other techniques to minimize grain clumping such as constant temperatures of all chemicals. I personally think that developing in temperatures at 70F or lower helps to keep grain clumping in check, but others may disagree. However, grain clumping tendencies vary by the film used, for example Kodak TMAX films and Ilford Delta films are much less sensitive to grain clumping than most older emulsions.