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If you have access to My Oracle Support I linked you to a very comprehensive document which covers some of the integration between Grants and Projects. The DocID is 1078531.1 in case the link doesn't work.
Unfortunately I cannot find on MOS a special whitepaper that was prepared a few years ago which gives a nice summary of how they work together. If you want to provide me your email address I can send you the whitepaper. You can email me at: email@example.com
I believe that the document Dean refers to is found in this MOS note:-
Project Managment & Grants Accounting Are Certified To Work In Same Operating Unit [ID 878214.1]
To address some other points:-
1) Grants Accounting (GMS) uses many of the same database objects as Project Accounting (PA). The best way to think of it is as a "customisation" of Project Accounting; albeit one that has been created by Oracle. For example, when a new grant is created (called an Award, stored in GMS_AWARDS_ALL) a supporting record is also automatically created in PA_PROJECTS_ALL
2) Because of 1), Grants Accounting and Project Accounting cannot be implemented and used independently within the same Operating Unit; Grants is built on Projects. However, some Projects features can still be used directly, such as elements of Project Management as described by the above document
3) Grants tends to only be used within the higher education, research and public sectors. Organisations within these industries typically have complex project funding structures, and have a requirement for tight budgetary control enforced by the system. Grants provides functionality to cater for both of these requirements, better than Projects does on its own. This does of course come at a price; by implementing Grants there are some Projects features that are not available
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