Of course, in my opinion, the biggest advantage of groups is using dynamic group membership.
Having group membership "automatically update" based on contact fields is awesome. I use a group fro "friends", another for "employees" etc based on the ID/Status field content and I can then do quick lookups and mail merges from the groups view
I have just started using ACT - I was using TeleMagic, but it is gone now. Anyway why when I enter a contact does it not ask me about company and groups? For example i have several contacts in one company but when I change to the company view that company is not listed and neither are my contacts.
Contacts can belong to more than one company, just like groups, but you can only link a contact to one company. Companies has dynamic criteria as well just like groups. The only difference between groups and companies is the company link feature as of ACT! 10. In ACT! 8 the other difference would be you can't make companies private or limited access.