Being in Japan "the country of groupism", I say honestly that I feel groups are a single entity working together as a single unit for a purpose. As you say groups can work like a user profile which I think is great and the members can be given "roles" or levels of responsibility. Wouldn't it be natural for the groups to also have friend groups?

The floating member menu is better but only now I noticed what bothers me. It is over other stuff. It feels in the way. A solid block see more which could be moved to the side or top which lets the information be seen as a whole would be more comfortable for me. Or a pop up one that appears with a mouse rollover would be helpful. The users should be given more choice how to set it or even disable it. They could even put what they want in it like a tool bar setting.

As you said "creating avatars for "photos" didn't sound natural." Why not try a whole new concept of just renaming the avatar fuction. An avatar is kind of an identity maker and if I see the same one used by two or more people I don't feel it is personal. I like to see the persons photo. If they change their profile photo I'm confused so they need a "personal identity logo" so to speak. Anyway it is just an idea to help break into a different way of looking at them.