First of all - don't go shootin' from the hip testing anything until you get some legitimate advice. Saltillo is a great product but is very vulnerable to a lot of different invaisions.
The grout will have to be removed by hand. The tile is very soft and any of the machines available could easily and frequently cause damage to the tile. A hand-held grout saw tool is available at the home centers. The grout should be removed to a depth of about 2/3's (minimum) of the thickness of the tile.
YES, the tile must be sealed prior to grouting.
NOW, the main issue at this point is the stripping of the existing sealer. It would be helpful to know exactly what sealer was used the first time around.
