Grails 1.2 creates IntelliJ IDEA projects files for you

As of Grails 1.2-M2 you no longer need to explicitly create new IDEA projects for your grails applications. The grails create-app command will create an appropriate project file with all the required settings for you in the root folder of your newly created grails project.

Point the IntelliJ IDEA Open project dialog to the generated ipr file and you'll get the project open in your favorite IDE.

Once the project is open, press Control + Shift + Alt + S to open the project settings dialog and tell IDEA about your grails installation.

And that's it. Now everything should be setup for you. Press Shift + F10 to see your fresh new app flying in the browser immediatelly or start building your domain, controllers, services and such. Remember to use the Alt + Insert shortcut to save some effort when doing that.

Enjoy Grails development with pleasure!