Let's say I start with the default Blender (2.64) file, except I set the cube to be 1 for all dimensions. At that point, the cube is at xyz location (0,0,0).
Then, let's say I select the cube with right mouse button, and go to Object / Group / Create New Group, and confirm the name "Group" in the "Create New Menu" bar with [Enter]. The selection outline turns green, meaning it's a group "master" (as far as I can see).
Now, let's say I press Shift-A; and choose "Group Instance" > "Group", and set the new instance to Z=2.3; with all selected, the view looks something like this:

Now, let's say I deselect all with A, then select the group master with right-click; and let's say I move it to Y=-2; then the result is:

... that is, it is noticeable that the group instance/clone also moved in respect to its center (note the group instance axes, which remain in the set position)! Which means, I guess, that groups are defined in respect to the global coordinate center (0,0,0) as anchor.
My question is: is it possible to define a group, but in respect to the, say, bounding box center of the group as anchor - such that when I move/translate the group master, the group instances would remain anchored at their set position (basically, at the center of the group instance axes)? Also, is this documented anywhere in Blender documentation (I had problems finding this info)?
group instances, on the other hand inherit all of the geometry and data characteristics of their defining group of objects and also inherit their transforms with respect to the scene origin, not the group objects center.
The empty of the group instance acts as an additional displacement gizmo so that you can transform the instance, but moving the parent objects in the global coordinate system will propagate that change to the group instances.
Unfortunately, there's no such thing as a group origin-even a temporary one, so you can't produce a group instance that doesn't behave this way. Programs like AutoCAD have what are called 'blocks' which are collections of entities with a local coordinate system so that you can instance and transform them. AutoCAD stores block data in a non-graphical part of its and replaces the defining geoemtry with an instance of the block.
You acheive this same effect in blender by creating a group in a seperate blend file and then instancing it in your scene.
It's not always convenient to have a file link between a group definition and an instance of the group, so what I've generally done is assign my grouped objects to a layer that's turned off or create them in a new scene and then use instances everywhere in the layout scene.
