When I read the documentation regarding the "group" element, it looks like it would be used similar to the "all", "any" or "choice" tags.
It also says that it has optional "name" and "ref" attributes that cannot be used simultaneously.
However, when I try to create a group within a sequence, I get a validation complaint that the required "ref" attribute is missing. The page at http://www.w3schools.com/schema/el_group.asp does not say anything about a situation where this would be required.
It does have an example where a group is declared with a name and then used, by reference, late