GROUP BY is similar to DISTINCT in that it groups multiple records into one.
This example, borrowed from http://www.devguru.com/technologies/t-sql/7080.asp, lists distinct products in the Products table.
SELECT Product FROM Products GROUP BY Product
Product
-------------
Desktop
Laptop
Mouse
Network Card
Hard Drive
Software
Book
Accessory
The advantage of GROUP BY over DISTINCT, is that it can give you granular control when used with a HAVING clause.
SELECT Product, count(Product) as ProdCnt
FROM Products
GROUP BY Product
HAVING count(Product) > 2
Product ProdCnt
--------------------
Desktop 10
Laptop 5
Mouse 3
Network Card 9
Software 6