I would think that for maximum cutting speed along the line of contact the work and wheel need move in opposite directions, so assuming the lathe revolving in normal forwards direction, the grinder will need to be in front or behind the work-piece according to its own direction of rotation, and whether external or internal grinding.
Essentially if the work-piece surface is descending the grinder surface is ascending, and vice-versa, at the contact; so the cutting speed is the sum of the two surface speeds.
That is for continuous cuts, not interrupted such as in the case Old Mart describes.