What's the difference between a Google Group and a Contact List?
Stated simply, a Google Group is a single email address assigned to a grouping of users and a Google Contact List is a grouping of individual account addresses.
To send to the Group you start typing the email address of the group. When Google recognizes the group address a single email address is added to the To line in GMail. Most groups in the organization are available.
To send to a Contact list you start typing the Contact list name and when Google recognizes the contact list you click it and the list is added to GMail as single email addresses. Only your Contact lists are available.
Replying to a Google Group you only have to "Reply". Your email can be viewed by anyone in the group.
Replying to a Contact list a user must do a "Reply All" so that everyone can view your response. A simple "Reply" only responds to the sender.