I've been finding it difficult to reconcile these two hadeeths with regards to certain people:

1. Allah forgives anything but Shirk.

2. Allah will take out a person with even an atom's weight of faith, from hell.

A lot of our (Muslim) grandparents and great grandparents, committed many bidahs and maybe even clear acts of Shirk, out of complete ignorance because the correct Aqeedah was either not available to them or was corrupted in their countries (India, Pakistan, etc). But they prayed, fasted, gave zakaah, etc. and of course believed in all the basic tenets up to the knowledge available to them. They most probably didn't have access to good scholars either. So, based on the above two hadeeths, will they be forgiven or doomed to hell, considering that they had Iman, but committed acts of shirk? I know this may not have a clear-cut answer, but it would be nice to know the scholars' opinion on this.

That which forms the asl of the deen are praying to Allah alone, none is to be excused therein; not excused for ta'wil (by agreement of the scholars), and not excused for ignorance (according to the correct scholarly opinion).  Hence, those who attribute themselves to Islam yet pray to Jesus, Muhammad, or any other prophet, or slaughter for angels and jinns etc, are to be regarded as pagans.

Now, takfeer is usually used in two senses:

1) Takfeer in the worldly sense only, and

2) Takfeer in the worldly sense as well as the hereafter.

If a person is ignorant of some Shirk he might be committing, then he is a Mushrik as far as this world is concerned. Therefore, he is not to be buried amongst the Muslims, nor is he to be inherited, nor is he to be prayed over, nor forgiveness is sought for him. This is why, the belongings of the people of jahiliyyah that was buried since the time of jahiliyyah, if a Muslim recovers it, he treats it as rikaz, on which 1/5th Zakah is due, i.e., the same that is due on war booty. Because Islam treats their wealth - those who died in pre-Islamic ignorance upon Shirk, to be Mushrikun, even though there was no messenger amongst them, nor had a book to guide them. They were not excused for ignorance, despite the fact that they all claimed to be the followers of Ibrahim (عَلَيْهِ السَّلاَمُ) and they all made Hajj following in his footsteps, reciting the same talbiyah.

However, this is limited to the takfeer in the worldly sense.

In the hereafter, according to the correct opinion, they will be tested and those who pass will enter paradise and those who fail will enter Hell.  The people who fall into Shirk out of ignorance, when they have no way to learn the basics of the deen, are referred to as Ahl al-Fatrah, those who live in an age devoid of any message from Allah. Takfeer in the other sense means to declare that a person will be in the fire of Hell. This Takfeer dictates not only takfeer in this world but also the hereafter, and this can only be made after establishing the proofs upon the person concerned. And it is because people are often unable to differentiate between the two types of takfeer, they become confused over this issue and misunderstand a lot of what the scholars had to say on this issue, especially Shaykh Muhammad ibn 'Abd al-Wahhab. When he negates the fact that he makes takfeer of the grave-worshippers, he is negating al-takfeer al-mu'adhab 'alayhi, i.e. the takfeer which implies punishment in the hereafter, and not merely recognizing a person as a Mushrik in this world.

This is why there are other explicit statements of the Shaykh where he clearly states that a person is not excused for ignorance, and that the one who has the Qur'an, the hujja is already established against him. Similarly, his sons and his followers explained his statements similarly. This is also the position of Shaykh Ibn Baz and other contemporary scholars. Not only that this is an opinion held by scholars in Saudi Arabia, but according to one Hanafi scholar (can't remember his name off the top of my head) this is the majority opinion, as well as al-Qarafi al-Maliki (who came before Shaykh Muhammad ibn 'Abd al-Wahhab) who is quoted as supporting the same opinion.

And Allah knows best.