I'm with Bitt here, in that there have rarely been any Grammy winners or even nominees who didn't have a good deal of commercial success, at least in the major award categories. I will add, though, that The Grammys have always had the tendency to pick acts and recordings which were both popular AND good. "Good" means different things to different people, but basically, because the nominating and selecting committes are made up of people from the music industry rather than fans, you'll tend to get a different version of what's "good."

The recording academy will tell you that they don't take album sales or chart positions into account, and I think history has shown there's a grain or two of truth in that statement... Most of the other award shows might as well just mail the awards to the most commercially successful acts from that year, whereas with the Grammys, it's more of a question of "among these commercially successful acts/records, which do other musicians and music industry heavyweights appreciate the most?" Slight variations on the same theme, I guess.