How do {Heartstone} and {Training Grounds} react with "X" cost activated abilities, such as on {Steel Hellkite}? Is the cost of X reduced, allowing you to make X a little larger should you so choose, or let you make X = 4 and pay 1 mana (if you had both grounds and stone in play)? Or is X not effected by these?
X is not affected by those cards. You still have to pay into X.
Gorzo is right. You announce the ability and put it on the stack. Then you announce variable values (in his example X=4). Choose targets. Determine costs (additional-reductions, so 4-2-1=1 ) and activate mana abilities. Then you pay the cost.
In this case X=1, 2, 3, or 4 would each cost a minimum of 1 mana.