It is necessary to install the Sanguinololu board into the Arduino IDE before being able to compile and flash the GRBL firmware.
For this, copy the Sanguinololu folder into the hardware/ folder of the Arduino IDE (often located in the Sketchbook library)
Note: If you have problems programming the Sanguinololu, you may need to change the baud rate (upload.speed=XXXXX) in "Sanguino/avr/boards.txt". Try values: 38400, 57600, and 115200.
If problems persist, refer to: http://reprap.org/wiki/Sanguinololu#Troubleshooting
Then running the Arduino IDE, you'll see new options in the "Tools" menu:
ATmega644P is probably the one on board your Sanguinololu.
Obtained from: https://github.com/Lauszus/Sanguino
The code is released under the GNU General Public License.