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Okay, no grease. Its too gummy, you'll end up collecting a lot of crud on your chain and you'll muck up your shifting. There are a lot of bike specific lubes out there. My father-in-law is a shockingly cheap er thrifty roady who experimented with a bunch of industrial lubes from work and found one cheap teflon based lubricant that worked well for his purposes. However, if you are mountain biking you should stick with lubes that tend toward dryness.
The first thing to do is to take a look at your derailler hanger see if it isn't bent out of alignment. Looking at 3 it appears that your derailler is not in line. Check the cage and see if its bent.
Is your upper pulley/chain touching the cassette? You may have a little chain stretch. If it is touching you can adjust your chain tension, either with the screw adjust on the rear of the derailler or by removing a couple links.
Also check your pulleys, if they are damaged you can pick up an after market set.
later on Griff
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