I took some shots with the graduated neutral density filter I got from Fotodiox and compared the results with those of a circular polarizer.
The Cokin style filter holder allows the graduation to be positioned anywhere in the frame:
TEST SHOTS VS. CIRCULAR POLARIZER
Both a circular polarizer and a grad ND filter can be used to get bluer skies. However, there are differences. First, a circular polarizer will reduce reflections from water surfaces as well. If that's what you want to do, then a circular polarizer would be a good choice. In this particular case, I thought the reflections made the water look more interesting, so I opted for the grad ND with the shots above.
No filter - ISO 160, 1/250, f/13:
Circular polarizer at minimum polarization - ISO 160, 1/250, f/6.3:
Circular polarizer at maximum polarization - ISO 160, 1/250, f/6.3:
Graduated ND filter - ISO 160, 1/250, f/6.3:
Second, with an ND filter, the graduation would darken the entire upper part of the frame (whereas a circular polarizer would make only the skies deeper blue, without darkening other elements in the photo such as clouds and foreground objects). In this shot the ND filter darkened the cow's head. I should have used a circular polarizer:
Third, the effect of an ND filter is less pronounced at telephoto lengths. This one was at 50mm (75mm equivalent in 35mm terms)
STACKED CPL AND GRAD ND
Out of curiosity I tried stacking a circular polarizer and graduated ND filter. The effect looks too unnatural for me but I suppose it can be used for special effects such as to darken skies.
Graduated ND and circular polarizer at minimum polarization:
Graduated ND and circular polarizer at maximum polarization: