Group/ungroup layers is an old “term” inside of many of the Adobe products. Yes you would say, but its new to Adobe Bridge CS3 - exact name of the function is “Group as Stack“. With this new functionality you can group pictures directly inside Bridge - all you have to do is to select all the pictures you want to group inside Bridge and then press ctrl + G. To ungroup them, with group selected press ctrl + shift + G.
When you got a group, the only thing you gonna see of this group is the first picture in the stacking order on top of the group as thumbnail, plus visual indication that you have a group. To change the first picture in the stacking order, for better visual indication of what’s inside, go to Stack > Open Stack then select the picture you want to be on top of the stack and then Stacks > Promote to Top of Stack.
If you got multiple Groups in one folder you can easily expand and collapse all of them with one click - Stacks > Expand All Stacks respectively Stacks > Collapse All Stacks.