From BlenderWiki
Node maps can get quite complex. Blender allows you to group a set of nodes together to both save space and help you conceptualize what the net effect of a mini-map does to a material/image. This menu selection shows the names of the groups of nodes that you have defined. Select any one to add that group to the map.
Create a Node Group
A group is created by ⇧ Shift-clicking all the nodes you want in the group, and then selecting Node -> Make Group (CtrlG). The group node is shown with a green bar, and the name is shown in an editable field (⇧ Shift-click on the name to enter EditMode and change the name to something that represents what that group does. The input sockets to the group is the input sockets of contained nodes, and akin for output(s).
Editing Node Groups
You can select the group and press ⇆ Tab (or select Node -> Edit Group) to enter/leave the group.
Ungroup Nodes
You can select the group and press AltG (or select Node -> Ungroup) to convert the grouped nodes back to normal.
