When editing your profile page, you'll notice that there are several options for utilizing group permissions. Not only can you set up certain blocks to display for only certain groups, but you can also specify that only certain information within a block is visible to a certain group (i.e. For the "Contact Me" Block, you want only trusted FAMILY to have your home address, but you display your AIM name to REGISTERED MEMBERS).
Therefore, managing your network list of friends and setting up certain permissions each group is important. This tour will guide you through this process.