The Grouping tab in the Folder Format dialog lets you choose which column (if any) the file list is grouped by.
Group by: Select the column to group the list by, from the dropdown list. This column doesn't have to be displayed.
Scheme: If multiple grouping schemes have been defined for the group, you can pick the scheme from this dropdown.
Sort groups: Choose whether groups should be sorted in ascending or descending order.
Combine: Choose how to handle similar values:
Combine similar values: A range of similar values will be put in a single group (e.g. A-H).
Never combine values: Instead of A-H you would have A, B, C, D, E, F, G, H, etc. This is only really useful for text fields like User description.
Singletons in 'Other' group: Similar values won't be combined, except for groups with only one member (which will be combined into a group called 'Other').
Collapse all groups initially: File groups will start out as collapsed instead of expanded.
Put folders in their own group: No matter how files are grouped, all folders will be placed into their own group.