GROUPDATA node within loadusers XML file

Can anyone tell me what the GROUPDATA node is used for within the XML template used for loadusers??

I have poured over the Resources and Security manual, and it shows GROUPDATA node. It basically says you can add groups to the system, and I can see the examples they show.. Ok so yes I understand that. Ok, so what KIND of groups, and what are the groups used for? And how do they work???? Is it the same as Bookmark Group? People Group? I wished these manuals would be better at documenting some of these things.

Thanks in advance,
-Roger