hi Tekkybot,
I think it really depends on what you prefer. I am definitely one who creates too many groups than sensible.
as Alan said, you mainly use groups to seperate geometry (prevent it from sticking together) and for easier selection. I normally try to group geometry like in real life - if I have two pieces of wood, these will be two seperate groups. a nail keeping them together will be a seperate group again...
of course grouping allways has it's atvantages and disadvantages.
http://img137.imageshack.us/img137/306/groupinghe1.jpg
let me explain how I would proceed in a model with the above example:
the house is a seperate group of course, like that I am not in danger of selecting any bits of it, when trying to highlight the table
the table is a component (because it is likely that I will reuse the table in the model lateron...)
the table top is a seperate group and the table legs are components (remember: repetition of the same element - components keep the file size down)
the vase on the table is a component (again: I may want to reuse this one in the model)
I put the table and the vase into a group. why? because if I now move it, the vase will stay on top of the table. this group is definitely arguable, because it is not too much effort to select vase + table manually and the model may become a bit confusing.
with such a structured model it is very easy to select only the parts, that I really want to change. the danger of selecting geometry behind the object of interest is small.
but what if I want to stretch the table a bit?
first I have to enter the table/vase group. then I have to double-click the table component. then I can move the two table legs. and finally I have to enter the table top group to alter its proportions.
if I hadn't put the table top in a seperate group, I could have selected and moved both desk top and legs at the same time.
in such situations you have to choose, whether you want a extremely structured model of a more practical one. Alan's approach of reducing the number of groups will be more practical. my approach of seperating everything gives you peace of mind π
unfortunately a global selection function does not exist. I suggested it once, but not many people seem to share my wish for such a tool.
so my advice. better greate one group more than necessary and explode it again later, when you are sure you don't need it.