GriPhyN (Grid Physics Network) is a large US collaboration to build grid services for large physics experiments, one of which is LIGO, a gravitational-wave observatory. This paper explains the physics and computing challenges of LIGO, and the tools that GriPhyN will build to address them. A key component needed to implement the data pipeline is a virtual data service; a system to dynamically create data products requested during the various stages. The data could possibly be already processed in a certain way, it may be in a file on a storage system, it may be cached, or it may need to be created through computation. The full elaboration of this system will allow complex data pipelines to be set up as virtual data objects, with existing data being transformed in diverse ways.