Can Access Control Groups be nested? Can a group contain a group and if I do this will the CheckPersmission method work?

From the JavaDoc for Group...

"Note that Group extends Principal. Thus, either a Principal or a Group can be passed as an argument to methods containing a Principal parameter. For example, you can add either a Principal or a Group to a Group object by calling the object's addMember method, passing it the Principal or Group."

You need to make sure that your implmentation of Acl.checkPermission() supports groups.