It seems that creating a Contact Group just copies email addresses to a list. When modifying the original Address Book entry for someone on the list, the Contact Group is not updated.

This is a hassle, if you have many Contact Groups and some of the Contacts in your address book are in many of them. You would have to manually edit all Contact Groups.

If Contact Groups where a list of pointers to LDAP entries in the Address book, things could look brighter.