Re:grandfather paradox
Or he wasn't your grandfather! This idea was used in a Futurama episode - memory's a bit fuzzy on some details, but Fry's purported ancestor (grandfather?) dies and Fry fathers the next ancestor in line.
I don't think the entire timeline has to be strictly deterministic - only parts related to the time travel. The past is fully determined, and once a time traveller has travelled back from the future his past is part of the past, and thus deterministic to people in the present.
You can't go back and kill someone at a time when they weren't killed, but you could put a winning lottery ticket in a drawer and not open the drawer again until after travelling back to the future. In short you can theoretically make any change that there's no proof didn't happen.
Since historical records aren't always true, time travellers could even go back and do things history says didn't happen, although trying to do this deliberately is 1) most likely pointless as history will still say it didn't happen, and 2) asking for trouble as the most likely way for history to say it didn't happen is if it didn't happen, perhaps because something happened to the time traveller on his (or her) way to do the deed.
EDIT: Shucks! I should have gotten a headache tablet manufacturer to sponsor this post! :-)