First of all, thanks to everyone that's chiming in.  I've tried with both homeground which may be to coarse but also storebought which I think looks very fine ground.

The results always seem to be - oil with the taste of oil (no taste that is) and some sand on the bottom. Also, shouldn't at least the homeground spices scent the oil or at least taste something in their own right. For example my coriander seeds tastes a lot when I eat them before grinding and adding to the oil. But then they just taste like grit as I've pointed out earlier. Maybe I'm also using to much oil.         

How do your "pastes" taste like? Of course this depends on the spices used, but in general. Nice and fragrant?

I've tried many different ways. In last nights effort I just put them in oil that had reached rather low heat, continiued with the low heat and stirred around. The low heat was due to burning the spices in previous attempts.