Groove is collaboration software that allows project teams to work together in a more efficient manner.  How?  Below are some of its features:

• The Files tool is used to store, organize, and share files. To support offline usage, Groove stores all workspace content on the team member’s hard drives. Thus, when you disconnect, you have the most current files up to that point in time. Groove detects when you get back online, and coordinates updates for all of the workspace content and alerts you to any file conflicts.  If a file is edited by two people at the same time, Groove will save both copies of the file and allow you to merge the documents, or keep both versions.  File updates are fully encrypted, so team members can share project activities and information in secure peer-to-peer workspaces.  Groove allows data to transparently cross any firewall. Groove software detects the presence of a firewall and determines the most efficient ports and protocols through which it can pass.  Groove strategically synchronizes files while using as little bandwidth as possible.
• The Calendar tool lets you mark important dates and build collaborative schedules with other members of a workspace.
• The Discussion tool lets you exchange ideas with other members of the workspace. The Discussion tool lets you view the entire thread of a conversation in a hierarchical structure. So as new team members join the project, they can explore the history of the project and view all of the relevant files.  In addition, you can search for any text or sort the threads by category or date.  Groove lets team members know who is online and who is active in a shared workspace. Groove allows you to chat with team members in real-time and can alert you to any new project activity that is important to you.
• The Forms tool lets workspace members create records using custom forms which may be displayed in custom views. You can also save a customized form as a tool template which can be added to any workspace.
• The InfoPath Forms tool enables application developers to create and lay out most design objects (forms and the fields that display on forms) in Microsoft Office InfoPath, and then import the solution into the Groove InfoPath forms tool designer.
• The Issue Tracking tool is used to report, manage and track the status of issues and incidents.
• The Meetings tool helps you organize, conduct, and record meetings via audio conferencing.
• The Notepad tool allows you to create multiple rich-text pages that can include images and links.
• The SharePoint Files tool allows you to connect and keep synchronized SharePoint Document library and documents in your Groove workspace.

So, should you use Groove 2007 or SharePoint for collaboration? Groove 2007 is designed for small teams working on project-driven activities and collaborative business applications from any location even when they are offline. Windows SharePoint Services is a centralized system where work gets published and, broadly shared among a larger team of people or the entire organization. Windows SharePoint Services also enables you to search data and integrate with structured business applications.  The two products are also highly complementary. Groove 2007 client works with the backend of Windows SharePoint Services and Office SharePoint Server. This combination provides the power of a centralized infrastructure with a decentralized rich client. With SharePoint Files tool, you can synchronize or check out files from a SharePoint document library, collaborate on and revise the files among a small team within a Groove workspace, and then publish the final documents back to SharePoint for structured reviews or long-term storage.

There is an excellent training “Getting Started with Microsoft® Office Groove® 2007” at https://www.microsoftelearning.com/eLearning/offerDetail.aspx?offerPriceId=99495.  The notes above are largely based on the content from this training.