I asked a question on the GUM (Groovy Users of Minnesota) User list about how to achieve a user/machine specific config.

I didn't have much time to figure it out but this is what I ended up finding out:

Grails 1.1.1 create-app generates a Config.groovy with this as the first few lines that would have told me what I need to know if I actually took the time to read it:
// locations to search for config files that get merged into the main config
// config files can either be Java properties files or ConfigSlurper scripts
//
// grails.config.locations = [ "classpath:${appName}-config.properties",
//                             "classpath:${appName}-config.groovy",
//                             "file:${userHome}/.grails/${appName}-config.properties",
//                             "file:${userHome}/.grails/${appName}-config.groovy"]
//
// if(System.properties["${appName}.config.location"]) {
//    grails.config.locations << "file:" + System.properties["${appName}.config.location"]
// }

So in my case all I had to do was put this in Config.groovy:
if (new File("${userHome}/.grails/${appName}-config.groovy").exists()){
    grails.config.locations = ["file:${userHome}/.grails/${appName}-config.groovy"]
}

which allowed me to override properties by doing something like this in my ~/.grails/${appName}-config.groovy :
username = "sa"
password = "sekret"
// environment specific settings
environments {
    development {
        dataSource {
            dbCreate = "create-drop" // use your imagination...
        }
    }
}

I also ran across a little gem that you can do the same type of config merging with your BuildConfig.groovy by implementing a ~/.grails/settings.groovy file. (yes its hardcoded rather than a config.locations property in BuildConfig.groovy – see BuildSettings.groovy for more)

Now I really wish there was a way to set defaults for things like server.port in the configs.

Thanks, Ted Naleid, Scott Vlaminck, and Robert Fischer for helping me find what I was looking for!