diff -rupN includes/content.admin.inc includes/content.admin.inc
--- includes/content.admin.inc	2009-01-22 01:27:28.000000000 +0100
+++ includes/content.admin.inc	2009-01-22 01:23:58.000000000 +0100
@@ -141,6 +141,7 @@ function content_field_overview_form(&$f
   if (module_exists('fieldgroup')) {
     $groups = fieldgroup_groups($type['type']);
     $group_types = fieldgroup_types();
+    $plain_tree = _fieldgroup_plain_tree($groups);
     $group_options = _fieldgroup_groups_label($type['type']);
     // Add the ability to group under the newly created row.
     $group_options['_add_new_group'] = '_add_new_group';
@@ -188,6 +189,8 @@ function content_field_overview_form(&$f
 
   // Groups.
   foreach ($groups as $name => $group) {
+    $current_group_options = $plain_tree;
+    unset($current_group_options[$name]);
     $weight = $group['weight'];
     $form[$name] = array(
       'label' => array('#value' => check_plain($group['label'])),
@@ -196,17 +199,24 @@ function content_field_overview_form(&$f
       'configure' => array('#value' => l(t('Configure'), 'admin/content/node-type/'. $type['url_str'] .'/groups/'. $group['group_name'])),
       'remove' => array('#value' => l(t('Remove'), 'admin/content/node-type/'. $type['url_str'] .'/groups/'. $group['group_name'] .'/remove')),
       'weight' => array('#type' => 'textfield', '#default_value' => $weight, '#size' => 3),
-      'parent' => array('#type' => 'hidden', '#default_value' => ''),
+      'parent' => array('#type' => 'select', '#options' => $current_group_options, '#default_value' => ''),
+      'prev_parent' => array('#type' => 'hidden', '#value' => ''),
       'hidden_name' => array('#type' => 'hidden', '#default_value' => $group['group_name']),
-      '#root' => TRUE,
+      //'#root' => TRUE,
       '#row_type' => 'group',
       'group' => array('#type' => 'value', '#value' => $group),
     );
     // Adjust child fields rows.
-    foreach ($group['fields'] as $field_name => $field) {
-      $form[$field_name]['parent']['#default_value'] = $name;
-      $form[$field_name]['prev_parent']['#value'] = $name;
+    if (isset($group['fields'])) {
+      foreach ($group['fields'] as $field_name => $field) {
+        $form[$field_name]['parent']['#default_value'] = $name;
+        $form[$field_name]['prev_parent']['#value'] = $name;
+      }
     }
+    // Adjust child group rows
+    $form[$name]['parent']['#default_value'] = $group['parent_group_name'];
+    $form[$name]['prev_parent']['#value'] = $group['parent_group_name'];
+
     $form['#group_rows'][] = $name;
     $weights[] = $weight;
   }
@@ -303,6 +313,8 @@ function content_field_overview_form(&$f
 
   // Additional row : add new group.
   if (module_exists('fieldgroup')) {
+    $current_group_options = $group_options;
+    unset($current_group_options[_add_new_group]);
     $weight++;
     $name = '_add_new_group';
     $form[$name] = array(
@@ -326,9 +338,10 @@ function content_field_overview_form(&$f
         '#value' => 'standard',
       ),
       'weight' => array('#type' => 'textfield', '#default_value' => $weight, '#size' => 3),
-      'parent' => array('#type' => 'hidden', '#default_value' => ''),
+      'parent' => array('#type' => 'select', '#options' => $current_group_options, '#default_value' => ''),
+      'prev_parent' => array('#type' => 'hidden', '#value' => ''),
       'hidden_name' => array('#type' => 'hidden', '#default_value' => $name),
-      '#root' => TRUE,
+      //'#root' => TRUE,
       '#add_new' => TRUE,
       '#row_type' => 'add_new_group',
     );
@@ -635,6 +648,7 @@ function content_display_overview_form(&
     $form[$name] = array(
       'human_name' => array('#value' => check_plain($group['label'])),
       'weight' => array('#type' => 'value', '#value' => $weight),
+      'parent' => array('#type' => 'value', '#value' => ''),
     );
     if ($contexts_selector == 'basic') {
       $form[$name]['label'] = array(
@@ -659,6 +673,8 @@ function content_display_overview_form(&
     foreach ($group['fields'] as $field_name => $field) {
       $form[$field_name]['parent']['#value'] = $name;
     }
+    $form[$name]['parent']['#value'] = $group['parent_group_name'];
+    $form[$name]['group']['#value']['depth'] = $group['depth'];
   }
 
   $form['submit'] = array('#type' => 'submit', '#value' => t('Save'));
@@ -1599,13 +1615,29 @@ function content_alter_db_cleanup() {
  * relationships are sorted out.
  */
 function _content_overview_order(&$form, $field_rows, $group_rows) {
-  // Put weight and parenting values into a $dummy render structure
-  // and let drupal_render figure out the corresponding row order.
+  // Put weight and parenting values into a $dummy render structure.
   $dummy = array();
   // Group rows: account for weight.
   if (module_exists('fieldgroup')) {
+    $max_depth = 0;
     foreach ($group_rows as $name) {
-      $dummy[$name] = array('#weight' => $form[$name]['weight']['#value'], '#value' => $name .' ');
+      $depth = $form[$name]['group']['#value']['depth'];
+      if ($depth > $max_depth) {
+        $max_depth = $depth;
+      }
+      $parent = $form[$name]['parent']['#value'];
+      $pre_weight = $form[$name]['weight']['#value'];
+      if (isset($parent) && $parent != '') {
+        if ($pre_weight == 0) {
+          $pre_weight = 0.5;
+        }
+        $weight = $dummy[$parent]['#weight'] + ($pre_weight * pow(10, (-3 * $depth)));
+      }
+      else {
+        $weight = $pre_weight * pow(10, (-3 * $depth));
+      }
+      $dummy[$name] = array('#weight' => $weight, '#value' => $name .' ');
+      $form[$name]['#depth'] = $depth;
     }
   }
   // Field rows : account for weight and parenting.
@@ -1613,12 +1645,40 @@ function _content_overview_order(&$form,
     $dummy[$name] = array('#weight' => $form[$name]['weight']['#value'], '#value' => $name .' ');
     if (module_exists('fieldgroup')) {
       if ($parent = $form[$name]['parent']['#value']) {
-        $form[$name]['#depth'] = 1;
+        $pre_weight = $form[$name]['weight']['#value'];
+        $depth = $form[$parent]['group']['#value']['depth'] + 1;
+        if (isset($parent) && $parent != '') {
+          if ($pre_weight == 0) {
+            $pre_weight = 0.5;
+          }
+          $weight = $dummy[$parent]['#weight'] + ($pre_weight * pow(10, (-3 * $depth)));
+        }
+        else {
+          $weight = $pre_weight * pow(10, (-3 * $depth));
+        }
+        $dummy[$name] = array('#weight' => $weight, '#value' => $name .' ');
+        $form[$name]['#depth'] = $depth;
         $dummy[$parent][$name] = $dummy[$name];
         unset($dummy[$name]);
       }
     }
   }
+  // We have to do this at the end so as to cascade these moves bottom-up
+  // rather than use a recursive function top-down.
+  if (module_exists('fieldgroup')) {
+    while ($max_depth >= 0) {
+      foreach ($group_rows as $name) {
+        if ($form[$name]['group']['#value']['depth'] == $max_depth) {
+          $parent = $form[$name]['parent']['#value'];
+          if (isset($parent) && $parent != '') {
+            $dummy[$parent][$name] = $dummy[$name];
+            unset($dummy[$name]);
+          }
+        }
+      }
+      $max_depth--;
+    }
+  }
   return $dummy ? explode(' ', trim(drupal_render($dummy))) : array();
 }
 
diff -rupN includes/content.node_form.inc includes/content.node_form.inc
--- includes/content.node_form.inc	2008-12-27 23:22:56.000000000 +0100
+++ includes/content.node_form.inc	2009-01-22 01:11:04.000000000 +0100
@@ -264,7 +264,6 @@ function content_add_more_submit($form, 
   }
 }
 
-
 /**
  * Menu callback for AHAH addition of new empty widgets.
  */
@@ -324,12 +323,7 @@ function content_add_more_js($type_name_
   drupal_alter('form', $form_element, array(), 'content_add_more_js');
 
   // Add the new element at the right place in the (original, unbuilt) form.
-  if (module_exists('fieldgroup') && ($group_name = _fieldgroup_field_get_group($type['type'], $field_name))) {
-    $form[$group_name][$field_name] = $form_element[$field_name];
-  }
-  else {
-    $form[$field_name] = $form_element[$field_name];
-  }
+  content_set_form_element($field_name, $type['type'], $form, $form_element[$field_name]);
 
   // Save the new definition of the form.
   $form_state['values'] = array();
@@ -347,7 +341,7 @@ function content_add_more_js($type_name_
   $form = form_builder($_POST['form_id'], $form, $form_state);
 
   // Render the new output.
-  $field_form = (!empty($group_name)) ? $form[$group_name][$field_name] : $form[$field_name];
+  $field_form = content_get_form_element($field_name, $type['type'], $form);
   // We add a div around the new content to receive the ahah effect.
   $field_form[$delta]['#prefix'] = '<div class="ahah-new-content">'. (isset($field_form[$delta]['#prefix']) ? $field_form[$delta]['#prefix'] : '');
   $field_form[$delta]['#suffix'] = (isset($field_form[$delta]['#suffix']) ? $field_form[$delta]['#suffix'] : '') .'</div>';
@@ -364,3 +358,57 @@ function content_add_more_js($type_name_
   drupal_json(array('status' => TRUE, 'data' => $output));
   exit;
 }
+
+/**
+ * Store an element into a form.
+ *
+ * @param $field_name
+ *   The field name.
+ * @param $type
+ *   The content type where the field instance belongs to.
+ * @param $form
+ *   The form to store this field element into.
+ * @param $element
+ *   The form element to store.
+ */
+function content_set_form_element($field_name, $type, &$form, $element) {
+  if (module_exists('fieldgroup') && ($parents = _fieldgroup_field_get_parents($type, $field_name))) {
+    foreach (module_implements('fieldgroup_parents_alter') as $module) {
+      $parents = call_user_func($module .'_fieldgroup_parents_alter', $form, $parents, $type, $field_name);
+    }
+    $parents = array_reverse($parents);
+    $reference = &$form;
+    foreach (array_values($parents) as $group_name) {
+      $reference = &$reference[$group_name];
+    }
+    $reference[$field_name] = $element;
+  }
+  else {
+    $form[$field_name] = $element;
+  }
+}
+
+/**
+ * Retrieve an element from a form.
+ *
+ * @param $field_name
+ *   The field name.
+ * @param $type
+ *   The content type where the field instance belongs to.
+ * @param $form
+ *   The form to retrieve this field element from.
+ */
+function content_get_form_element($field_name, $type, $form) {
+  if (module_exists('fieldgroup') && ($parents = _fieldgroup_field_get_parents($type, $field_name))) {
+    foreach (module_implements('fieldgroup_parents_alter') as $module) {
+      $parents = call_user_func($module .'_fieldgroup_parents_alter', $form, $parents, $type, $field_name);
+    }
+    $parents = array_reverse($parents);
+    $reference = &$form;
+    foreach (array_values($parents) as $group_name) {
+      $reference = &$reference[$group_name];
+    }
+    return $reference[$field_name];
+  }
+  return $form[$field_name];
+}
diff -rupN modules/content_copy/content_copy.module modules/content_copy/content_copy.module
--- modules/content_copy/content_copy.module	2008-11-07 15:37:50.000000000 +0100
+++ modules/content_copy/content_copy.module	2009-01-21 13:23:23.000000000 +0100
@@ -149,6 +149,7 @@ function content_copy_export_form(&$form
         $form[$name] = array(
           'human_name' => array('#value' => check_plain($group['label'])),
           'group_name' => array('#value' => $group['group_name']),
+          'parent_group_name' => array('#value' => $group['parent_group_name']),
           'weight' => array('#type' => 'value', '#value' => $weight),
           '#row_type' => 'group',
         );
diff -rupN modules/fieldgroup/fieldgroup.install modules/fieldgroup/fieldgroup.install
--- modules/fieldgroup/fieldgroup.install	2008-12-26 12:51:46.000000000 +0100
+++ modules/fieldgroup/fieldgroup.install	2009-01-21 13:26:46.000000000 +0100
@@ -52,6 +52,7 @@ function fieldgroup_schema() {
       'group_type' => array('type' => 'varchar', 'length' => 32, 'not null' => TRUE, 'default' => 'standard'),
       'type_name'  => array('type' => 'varchar', 'length' => 32, 'not null' => TRUE, 'default' => ''),
       'group_name' => array('type' => 'varchar', 'length' => 32, 'not null' => TRUE, 'default' => ''),
+      'parent_group_name' => array('type' => 'varchar', 'length' => 32, 'not null' => FALSE, 'default' => ''),
       'label'      => array('type' => 'varchar', 'length' => 255, 'not null' => TRUE, 'default' => ''),
       'settings'   => array('type' => 'text', 'size' => 'medium', 'not null' => TRUE),
       'weight'     => array('type' => 'int', 'not null' => TRUE, 'default' => 0),
@@ -313,4 +314,17 @@ function fieldgroup_update_6007() {
   $ret = array();
   $ret[] = update_sql("DELETE FROM {content_group_fields} WHERE (field_name, type_name) NOT IN (SELECT field_name, type_name FROM {content_node_field_instance})");
   return $ret;
-}
\ No newline at end of file
+}
+
+/**
+ * Allow for nesting of fieldgroups.
+ */
+function fieldgroup_update_6008() {
+  if ($abort = content_check_update('fieldgroup')) {
+    return $abort;
+  }
+
+  $ret = array();
+  db_add_field($ret, 'content_group', 'parent_group_name', array('type' => 'varchar', 'length' => 32, 'not null' => FALSE, 'default' => ''));
+  return $ret;
+}
diff -rupN modules/fieldgroup/fieldgroup.module modules/fieldgroup/fieldgroup.module
--- modules/fieldgroup/fieldgroup.module	2009-01-10 23:47:07.000000000 +0100
+++ modules/fieldgroup/fieldgroup.module	2009-01-21 19:20:16.000000000 +0100
@@ -163,6 +163,7 @@ function fieldgroup_group_edit_form(&$fo
   $form['settings']['display']['label'] = array('#type' => 'value', '#value' => $group['settings']['display']['label']);
   $form['weight'] = array('#type' => 'hidden', '#default_value' => $group['weight']);
   $form['group_name'] = array('#type' => 'hidden', '#default_value' => $group_name);
+  $form['parent_group_name'] = array('#type' => 'hidden', '#default_value' => $group['parent_group_name']);
 
   $form['#content_type'] = $content_type;
 
@@ -207,6 +208,9 @@ function fieldgroup_remove_group_submit(
   $form_values = $form_state['values'];
   $content_type = $form['#content_type'];
   $group_name = $form['#group_name'];
+  $parent_group_name = db_fetch_array(db_query("SELECT parent_group_name FROM {". fieldgroup_tablename() ."} WHERE group_name = '%s' and type_name = '%s'", $group_name, $content_type['type']));
+  $result = db_query("UPDATE {". fieldgroup_tablename() ."} SET parent_group_name = '%s' WHERE parent_group_name = '%s'", $parent_group_name['parent_group_name'], $group_name);
+  $result = db_query("UPDATE {". fieldgroup_fields_tablename() ."} SET group_name = '%s' WHERE group_name = '%s'", $parent_group_name['parent_group_name'], $group_name);
   fieldgroup_delete($content_type['type'], $group_name);
   drupal_set_message(t('The group %group_name has been removed.', array('%group_name' => $group_name)));
   $form_state['redirect'] = 'admin/content/node-type/'. $content_type['url_str'] .'/fields';
@@ -224,23 +228,13 @@ function fieldgroup_groups($content_type
       $groups_sorted = $data['groups_sorted'];
     }
     else {
-      $result = db_query("SELECT * FROM {". fieldgroup_tablename() ."} ORDER BY weight, group_name");
+      $result = db_query("SELECT * FROM {". fieldgroup_tablename() ."} ORDER BY type_name, weight");
       $groups = array();
       $groups_sorted = array();
       while ($group = db_fetch_array($result)) {
-        $group['settings'] = unserialize($group['settings']);
-        $group['fields'] = array();
-        $groups[$group['type_name']][$group['group_name']] = $group;
+        $groups[$group['type_name']] = _fieldgroup_get_tree($group['type_name']);
         $groups_sorted[$group['type_name']][] = &$groups[$group['type_name']][$group['group_name']];
       }
-      //load fields
-      $result = db_query("SELECT nfi.*, ng.group_name FROM {". fieldgroup_tablename() ."} ng ".
- "INNER JOIN {". fieldgroup_fields_tablename() ."} ngf ON ngf.type_name = ng.type_name AND ngf.group_name = ng.group_name ".
- "INNER JOIN {". content_instance_tablename() ."} nfi ON nfi.field_name = ngf.field_name AND nfi.type_name = ngf.type_name ".
- "WHERE nfi.widget_active = 1 ORDER BY nfi.weight");
-      while ($field = db_fetch_array($result)) {
-        $groups[$field['type_name']][$field['group_name']]['fields'][$field['field_name']] = $field;
-      }
       cache_set('fieldgroup_data', array('groups' => $groups, 'groups_sorted' => $groups_sorted), content_cache_tablename());
     }
   }
@@ -253,6 +247,68 @@ function fieldgroup_groups($content_type
   return $sorted ? $groups_sorted[$content_type] : $groups[$content_type];
 }
 
+/**
+ * Create a tree of fieldgroups for nesting them.
+ */
+function _fieldgroup_get_tree($type_name, $parent_group_name = '', $depth = -1, $max_depth = null) {
+  static $children, $parents, $groups;
+
+  $depth++;
+  // We cache trees, so it's not CPU-intensive to call get_tree() on a term
+  // and its children, too.
+  if (!isset($children[$type_name])) {
+    $children[$type_name] = array();
+    $result = db_query("SELECT * FROM {". fieldgroup_tablename() ."} WHERE type_name = '%s' ORDER BY weight", $type_name);
+    while ($group = db_fetch_array($result)) {
+      $children[$type_name][$group['parent_group_name']][] = $group['group_name'];
+      $parents[$type_name][$group['group_name']][] = $group['parent_group_name'];
+      $groups[$type_name][$group['group_name']] = $group;
+      $groups[$type_name][$group['group_name']]['fields'] = array();
+      $groups[$type_name][$group['group_name']]['settings'] = unserialize($group['settings']);
+    }
+    // Load fields.
+    $result = db_query("SELECT nfi.*, ng.group_name FROM {". fieldgroup_tablename() ."} ng ".
+      "INNER JOIN {". fieldgroup_fields_tablename() ."} ngf ON ngf.type_name = ng.type_name AND ngf.group_name = ng.group_name ".
+      "INNER JOIN {". content_instance_tablename() ."} nfi ON nfi.field_name = ngf.field_name AND nfi.type_name = ngf.type_name ".
+      "WHERE nfi.widget_active = 1 ORDER BY nfi.weight");
+    while ($field = db_fetch_array($result)) {
+      $groups[$field['type_name']][$field['group_name']]['fields'][$field['field_name']] = $field;
+    }
+  }
+
+  $max_depth = (is_null($max_depth)) ? count($children[$type_name]) : $max_depth;
+  if (isset($children[$type_name][$parent_group_name])) {
+    foreach ($children[$type_name][$parent_group_name] as $child_group_name) {
+      if ($max_depth > $depth) {
+        $group = $groups[$type_name][$child_group_name];
+        $group['depth'] = $depth;
+        $group['parents'] = $parents[$type_name][$child_group_name];
+        $tree[$group['group_name']] = $group;
+        if ($children[$type_name][$child_group_name]) {
+          $tree = array_merge($tree, _fieldgroup_get_tree($type_name, $child_group_name, $depth, $max_depth));
+        }
+      }
+    }
+  }
+  return $tree ? $tree : array();
+}
+
+/**
+ * Go through a set of fieldgroups and construct a simple representation
+ * of their hierarchy.
+ */
+function _fieldgroup_plain_tree($items) {
+  $rows = array();
+  $rows[''] = '<'. t('none') .'>';
+  foreach ($items as $item) {
+    $group_name = $item['group_name'];
+    $label = t($item['label']);
+    if ($group_name) {
+      $rows[$group_name] = str_repeat('--', $item['depth']) . ' ' . $label;
+    }
+  }
+  return $rows;
+}
 
 function _fieldgroup_groups_label($content_type) {
   $groups = fieldgroup_groups($content_type);
@@ -268,53 +324,145 @@ function _fieldgroup_field_get_group($co
   return db_result(db_query("SELECT group_name FROM {". fieldgroup_fields_tablename() ."} WHERE type_name = '%s' AND field_name = '%s'", $content_type, $field_name));
 }
 
+function _fieldgroup_field_get_parents($content_type, $field_name) {
+  $counter = 0;
+  $parents[$counter] = db_result(db_query("SELECT group_name FROM {". fieldgroup_fields_tablename() ."} WHERE type_name = '%s' AND field_name = '%s'", $content_type, $field_name));
+  while ($result = db_result(db_query("SELECT parent_group_name FROM {". fieldgroup_tablename() ."} WHERE type_name = '%s' AND group_name = '%s'", $content_type, $parents[$counter]))) {
+    $counter++;
+    $parents[$counter] = $result;
+  }
+  return $parents;
+}
+
+function _fieldgroup_add_group_to_form(&$form, &$form_state, $form_id, $element, $group_name, $group, $groups) {
+  $element = array(
+    '#type' => 'fieldset',
+    '#title' => check_plain(t($group['label'])),
+    '#collapsed' => $group['settings']['form']['style'] == 'fieldset_collapsed',
+    '#collapsible' => in_array($group['settings']['form']['style'], array('fieldset_collapsed', 'fieldset_collapsible')),
+    '#weight' => $group['weight'],
+    '#depth' => $group['depth'],
+    '#group_parent' => $group['parent_group_name'],
+    '#description' => content_filter_xss(t($group['settings']['form']['description'])),
+    '#attributes' => array('class' => strtr($group['group_name'], '_', '-')),
+  );
+  $has_accessible_field = FALSE;
+  foreach ($group['fields'] as $field_name => $field) {
+    if (isset($form[$field_name])) {
+      $form[$field_name]['#weight'] = $field['weight'];
+      $element[$field_name] = $form[$field_name];
+      // Track whether this group has any accessible fields within it.
+      if (!isset($form[$field_name]['#access']) || $form[$field_name]['#access'] !== FALSE) {
+        $has_accessible_field = TRUE;
+      }
+      unset($form[$field_name]);
+    }
+  }
+  if (!empty($group['fields']) && !element_children($form[$group_name])) {
+    // Hide the fieldgroup, because the fields are hidden too.
+    unset($element[$group_name]);
+  }
+
+  if (!$has_accessible_field) {
+    // Hide the fieldgroup, because the fields are inaccessible.
+    $form[$group_name]['#access'] = FALSE;
+  }
+
+  // Allow other modules to alter the form.
+  // Can't use module_invoke_all because we want
+  // to be able to use a reference to $form and $form_state.
+  foreach (module_implements('fieldgroup_form') as $module) {
+    $function = $module .'_fieldgroup_form';
+    $function($form, $form_state, $form_id, $group);
+  }
+
+  /*$parent_group_name = $group_name;
+  foreach ($groups as $group_name => $group) {
+    if ($group['parent_group_name'] == $parent_group_name) {
+      $element[$group_name] = _fieldgroup_add_group_to_form($form, $form_state, $form_id, $element[$group_name], $group_name, $group, $groups);
+    }
+  }*/
+
+  return $element;
+}
+
 /**
  * Implementation of hook_form_alter()
  */
 function fieldgroup_form_alter(&$form, $form_state, $form_id) {
   if (isset($form['type']) && isset($form['#node']) && $form['type']['#value'] .'_node_form' == $form_id) {
-    foreach (fieldgroup_groups($form['type']['#value']) as $group_name => $group) {
-      $form[$group_name] = array(
-        '#type' => 'fieldset',
-        '#title' => check_plain(t($group['label'])),
-        '#collapsed' => $group['settings']['form']['style'] == 'fieldset_collapsed',
-        '#collapsible' => in_array($group['settings']['form']['style'], array('fieldset_collapsed', 'fieldset_collapsible')),
-        '#weight' => $group['weight'],
-        '#description' => content_filter_xss(t($group['settings']['form']['description'])),
-        '#attributes' => array('class' => strtr($group['group_name'], '_', '-')),
-      );
-
-      $has_accessible_field = FALSE;
-      foreach ($group['fields'] as $field_name => $field) {
-        if (isset($form[$field_name])) {
-          $form[$group_name][$field_name] = $form[$field_name];
-          // Track whether this group has any accessible fields within it.
-          if (!isset($form[$field_name]['#access']) || $form[$field_name]['#access'] !== FALSE) {
-            $has_accessible_field = TRUE;
-          }
-          unset($form[$field_name]);
-        }
-      }
-      if (!empty($group['fields']) && !element_children($form[$group_name])) {
-        //hide the fieldgroup, because the fields are hidden too
-        unset($form[$group_name]);
-      }
-
-      if (!$has_accessible_field) {
-        // Hide the fieldgroup, because the fields are inaccessible.
-        $form[$group_name]['#access'] = FALSE;
-      }
-
-      // Allow other modules to alter the form.
-      // Can't use module_invoke_all because we want
-      // to be able to use a reference to $form and $form_state.
-      foreach (module_implements('fieldgroup_form') as $module) {
-        $function = $module .'_fieldgroup_form';
-        $function($form, $form_state, $form_id, $group);
-      }
+    $group_rows = array();
+    $field_rows = array();
 
+    // Prepare data that will make this easier.
+    $groups = fieldgroup_groups($form['type']['#value']);
+    foreach ($groups as $name => $more) {
+      $group_rows[] = $name;
+    }
+    $fields = $form['#field_info'];
+    foreach ($fields as $name => $more) {
+      $field_rows[] = $name;
+    }
+
+    $field_check_off = $field_rows;
+    // Now run through the groups and come up with new weights for display purposes.
+    $max_depth = 0;
+    foreach ($group_rows as $name) {
+      $depth = $groups[$name]['depth'];
+      if ($depth > $max_depth) {
+        $max_depth = $depth;
+      }
+      $parent = $groups[$name]['parent_group_name'];
+      $pre_weight = $groups[$name]['weight'];
+      if (isset($parent) && $parent != '') {
+        if ($pre_weight == 0) {
+          $pre_weight = 0.5;
+        }
+        $weight = $groups[$parent]['weight'] + ($pre_weight * pow(10, (-3 * $depth)));
+      }
+      else {
+        $weight = $pre_weight * pow(10, (-3 * $depth));
+      }
+      $groups[$name]['weight'] = $weight;
+      // Run through the fields and come up with new weights for display purposes.
+      foreach ($groups[$name]['fields'] as $name2 => $elements) {
+        $pre_weight2 = $groups[$name]['fields'][$name2]['weight'];
+        $depth2 = $groups[$name]['depth'] + 1;
+        if ($pre_weight2 == 0) {
+          $pre_weight2 = 0.5;
+        }
+        $weight2 = $groups[$name]['weight'] + ($pre_weight2 * pow(10, (-3 * $depth2)));
+        $groups[$name]['fields'][$name2]['weight'] = $weight2;
+        $groups[$name]['fields'][$name2]['depth'] = $depth2;
+        if (in_array($name2, $field_check_off)) {
+          $index = array_search($name2, $field_check_off);
+          unset($field_check_off[$index]);
+        }
+      }
+    }
+    // Cover the top level fields that aren't in fieldgroups.
+    foreach ($field_check_off as $name) {
+      $form[$name]['#depth'] = 0;
+    }
+
+    // Now that we have the order of things as we want them, let's create the
+    // fieldsets for the fieldgroups.
+    foreach ($groups as $group_name => $group) {
+      $form[$group_name] = _fieldgroup_add_group_to_form($form, $form_state, $form_id, $form[$group_name], $group_name, $group, $groups);
+    }
+    // Reorder the groups from the inside-out in order to avoid a recursive function.
+    while ($max_depth >= 0) {
+      foreach ($group_rows as $name) {
+        if ($form[$name]['#depth'] == $max_depth) {
+          $parent = $form[$name]['#group_parent'];
+          if (isset($parent) && $parent != '') {
+            $form[$parent][$name] = $form[$name];
+            unset($form[$name]);
+          }
+        }
+      }
+      $max_depth--;
     }
-
   }
   // The group is only added here so it will appear in the export
   // when using Content Copy.
@@ -438,6 +586,9 @@ function fieldgroup_field_overview_form_
   // Parse incoming rows.
   $add_field_rows = array('_add_new_field', '_add_existing_field');
   $field_rows = array_merge($form['#fields'], $add_field_rows);
+  $add_group_rows = array($new_group_name);
+  $group_rows = array_merge($form['#groups'], $add_group_rows);
+
   foreach ($form_values as $key => $values) {
     // If 'field' row: update field parenting.
     if (in_array($key, $field_rows)) {
@@ -461,12 +612,15 @@ function fieldgroup_field_overview_form_
       // TODO: check the parent group does exist ?
       fieldgroup_update_fields(array('field_name' => $key, 'group' => $parent, 'type_name' => $type_name));
     }
+  }
 
-    // If 'group' row:  update groups weights
+  foreach ($form_state['values'] as $key => $values) {
+    // If 'group' row:  update groups weights and parent
     // (possible newly created group has already been taken care of).
-    elseif (in_array($key, $form['#groups'])) {
-      db_query("UPDATE {". fieldgroup_tablename() ."} SET weight = %d WHERE type_name = '%s' AND group_name = '%s'",
-        $values['weight'], $type_name, $key);
+    if (in_array($key, $group_rows)) {
+      $parent = ($values['parent'] == '_add_new_group' && isset($new_group_name)) ? $new_group_name : $values['parent'];
+      $weight = $values['weight'];
+      db_query("UPDATE {". fieldgroup_tablename() ."} SET weight = %d, parent_group_name = '%s' WHERE type_name = '%s' AND group_name = '%s'", $weight, $parent, $type_name, $key);
     }
   }
 
@@ -526,7 +680,67 @@ function fieldgroup_nodeapi(&$node, $op,
           $context = $node->build_mode;
         }
 
-        foreach (fieldgroup_groups($node->type) as $group_name => $group) {
+        // Prepare data that will make this easier.
+        $group_rows = array();
+        $field_rows = array();
+        $groups = fieldgroup_groups($node->type);
+        foreach ($groups as $name => $more) {
+          $group_rows[] = $name;
+        }
+        $fields = $node->content;
+        foreach ($fields as $name => $more) {
+          if (strstr($fields, 'field_')) {
+            $field_rows[] = $name;
+          }
+        }
+        $field_check_off = $field_rows;
+
+        // Now run through the groups and come up with new weights for display purposes.
+        $max_depth = 0;
+        foreach ($group_rows as $name) {
+          $depth = $groups[$name]['depth'];
+          if ($depth > $max_depth) {
+            $max_depth = $depth;
+          }
+          $parent = $groups[$name]['parent_group_name'];
+          $pre_weight = $groups[$name]['weight'];
+          if (isset($parent) && $parent != '') {
+            if ($pre_weight == 0) {
+              $pre_weight = 0.5;
+            }
+            $weight = $groups[$parent]['weight'] + ($pre_weight * pow(10, (-3 * $depth)));
+          }
+          else {
+            $weight = $pre_weight * pow(10, (-3 * $depth));
+          }
+          $groups[$name]['weight'] = $weight;
+          // Run through the fields and come up with new weights for display purposes.
+          foreach ($groups[$name]['fields'] as $name2 => $elements) {
+            $pre_weight2 = $groups[$name]['fields'][$name2]['weight'];
+            $depth2 = $groups[$name]['depth'] + 1;
+            if ($pre_weight2 == 0) {
+              $pre_weight2 = 0.5;
+            }
+            $weight2 = $groups[$name]['weight'] + ($pre_weight2 * pow(10, (-3 * $depth2)));
+            $groups[$name]['fields'][$name2]['weight'] = $weight2;
+            $groups[$name]['fields'][$name2]['depth'] = $depth2;
+            if (in_array($name2, $field_check_off)) {
+              $index = array_search($name2, $field_check_off);
+              unset($field_check_off[$index]);
+            }
+          }
+        }
+
+        // Cover the top level fields that aren't in fieldgroups.
+        foreach ($field_check_off as $name) {
+          $depth = 0;
+          $pre_weight = $node->content[$name]['#weight'];
+          $weight = $pre_weight * pow(10, (-3 * $depth));
+          $node->content[$name]['#weight'] = $weight;
+          $node->content[$name]['#depth'] = $depth;
+        }
+
+        foreach ($groups as $group_name => $group) {
           // Do not include group labels when indexing content.
           if ($context == NODE_BUILD_SEARCH_INDEX) {
             $group['settings']['display']['label'] = 'hidden';
@@ -583,14 +797,29 @@ function fieldgroup_nodeapi(&$node, $op,
           $wrapper = array(
             'group' => $element,
             '#weight' => $group['weight'],
+            '#depth' => $group['depth'],
             '#post_render' => array('fieldgroup_wrapper_post_render'),
             '#group_name' => $group_name,
             '#type_name' => $node->type,
             '#context' => $context,
+            '#group_parent' => $group['parent_group_name'],
           );
 
           $node->content[$group_name] = $wrapper;
         }
+        // Reorder the groups from the inside-out in order to avoid a recursive function.
+        while ($max_depth >= 0) {
+          foreach ($group_rows as $name) {
+            if ($node->content[$name]['#depth'] == $max_depth) {
+              $parent = $node->content[$name]['#group_parent'];
+              if (isset($parent) && $parent != '') {
+                $node->content[$parent]['group'][$name] = $node->content[$name];
+                unset($node->content[$name]);
+              }
+            }
+          }
+          $max_depth--;
+        }
       }
       break;
   }
@@ -612,7 +841,7 @@ function fieldgroup_wrapper_post_render(
   return $content;
 }
 
-/*
+/**
  * Get the group name for a field.
  * If the field isn't in a group, FALSE will be returned.
  * @return The name of the group, or FALSE.
@@ -684,15 +913,15 @@ function fieldgroup_save_group($type_nam
 
   if (!isset($groups[$group['group_name']])) {
     // Accept group name from programmed submissions if valid.
-    db_query("INSERT INTO {". fieldgroup_tablename() ."} (group_type, type_name, group_name, label, settings, weight)".
-      " VALUES ('%s', '%s', '%s', '%s', '%s', %d)", $group['group_type'], $type_name, $group['group_name'], $group['label'], serialize($group['settings']), $group['weight']);
+    db_query("INSERT INTO {". fieldgroup_tablename() ."} (parent_group_name, group_type, type_name, group_name, label, settings, weight)".
+      " VALUES ('%s','%s', '%s', '%s', '%s', '%s', %d)", $group['parent_group_name'], $group['group_type'], $type_name, $group['group_name'], $group['label'], serialize($group['settings']), $group['weight']);
     cache_clear_all('fieldgroup_data', content_cache_tablename());
     return SAVED_NEW;
   }
   else {
-    db_query("UPDATE {". fieldgroup_tablename() ."} SET group_type = '%s', label = '%s', settings = '%s', weight = %d ".
-             "WHERE type_name = '%s' AND group_name = '%s'",
-             $group['group_type'], $group['label'], serialize($group['settings']), $group['weight'], $type_name, $group['group_name']);
+    db_query("UPDATE {". fieldgroup_tablename() ."} SET parent_group_name = '%s', group_type = '%s', label = '%s', settings = '%s', weight = %d ".
+      "WHERE type_name = '%s' AND group_name = '%s'",
+      $group['parent_group_name'], $group['group_type'], $group['label'], serialize($group['settings']), $group['weight'], $type_name, $group['group_name']);
     cache_clear_all('fieldgroup_data', content_cache_tablename());
     return SAVED_UPDATED;
   }
@@ -762,6 +991,7 @@ function theme_fieldgroup_fieldset($elem
 function fieldgroup_preprocess_fieldgroup_simple(&$vars) {
   $element = $vars['element'];
 
+  $vars['parent_group_name'] = $element['#parent_group_name'];
   $vars['group_name'] = $element['#group_name'];
   $vars['group_name_css'] = strtr($element['#group_name'], '_', '-');
   $vars['label'] = isset($element['#title']) ? $element['#title'] : '';;
diff -rupN modules/fieldgroup/fieldgroup.tabledrag.js modules/fieldgroup/fieldgroup.tabledrag.js
--- modules/fieldgroup/fieldgroup.tabledrag.js	1970-01-01 01:00:00.000000000 +0100
+++ modules/fieldgroup/fieldgroup.tabledrag.js	2009-01-21 19:23:00.000000000 +0100
@@ -0,0 +1,121 @@
+// $Id$
+
+/**
+ * @file
+ * Override Drupal tabledrag methods to add support for nested fieldgroups.
+ */
+
+/**
+ * Adjust the classes associate with a row's weight when it is dropped.
+ * Use the parent's name to base the change on.
+ */
+Drupal.tableDrag.prototype.onDrop = function() {
+  tableDragObject = this;
+  var siblingRowUp = $(tableDragObject.rowObject.element).prev('tr');
+  var siblingRowsDown = $(tableDragObject.rowObject.element).nextAll('tr');
+  var weightField = $('input.field-weight', tableDragObject.rowObject.element);
+  var siblingWeightFieldDown = $('input.field-weight', siblingRowsDown);
+  var oldWeightField = $('input.field-weight', tableDragObject.rowObject.element);
+  var previousRow = $(tableDragObject.rowObject.element).prev('tr');
+
+  while (previousRow.length && $('.indentation', previousRow).length >= this.rowObject.indents) {
+    previousRow = previousRow.prev('tr');
+  }
+  // If we found a row.
+  if (previousRow.length) {
+    sourceRow = previousRow[0];
+    var oldGroupField = $('input.field-name', sourceRow);
+    var newGroupName = oldGroupField[0].value.replace(/_/g, '-');
+  }
+  // Otherwise we went all the way to the left of the table without finding
+  // a parent, meaning this item has been placed at the root level.
+  else {
+    var newGroupName = "top";
+  }
+
+  var oldGroupName = oldWeightField[0].className.replace(/([^ ]+[ ]+)*field-weight-([^ ]+)([ ]+[^ ]+)*/, '$2');
+  var oldClass = 'field-weight-' + oldGroupName;
+  var newClass = 'field-weight-' + newGroupName;
+  weightField.removeClass(oldClass).addClass(newClass);
+
+  //Now that we've updated the class names, let's make sure the weight is properly set.
+  //First make sure that if the rows above are nested deeper, that we find their parent, which is a sibling of
+  //our current row. 
+  while (siblingRowUp.length && $('.indentation', siblingRowUp).length > this.rowObject.indents) {
+    siblingRowUp = siblingRowUp.prev('tr');
+  }
+  //before we set the new weight, make sure we know whether the previous row is a sibling or a parent
+  var siblingIndent = $('.indentation', siblingRowUp).length;
+  var indents = this.rowObject.indents;
+
+  //if we found a sibling
+  if (siblingIndent == indents) {
+    //the previous row is a sibling, so let's set the new weight
+    var siblingWeightFieldUp = $('input.field-weight', siblingRowUp);
+    var siblingWeightUp = siblingWeightFieldUp[0].value;
+    var newWeight = parseInt(siblingWeightUp) + 1;
+    $('input.field-weight', tableDragObject.rowObject.element).val(newWeight);
+
+    //now deal with the case where we moved left/right
+    if (oldClass != newClass) {
+      $(tableDragObject.rowObject.element).nextAll('tr').each(function() {
+        if ($('input.field-weight', this).hasClass(newClass)) {
+          //let's make sure we grab an actual sibling
+          var prevRow = $(this).prev('tr');
+          //alert("Prevrow length: " + prevRow.length);
+          //alert("This indents: " + $('.indentation', this).length);
+          //alert("Indentation length? " + $('.indentation', prevRow).length);
+          while (prevRow.length && $('.indentation', prevRow).length > $('.indentation', this).length) {
+            prevRow = prevRow.prev('tr');
+          }
+          var prevWeight = $('input.field-weight', prevRow).val();
+          var incWeight = parseInt(prevWeight) + 1;
+          $('input.field-weight', this).val(incWeight);
+        }
+      });
+    }
+  }
+  else {
+    //the previous row is a parent, which means we're at the top of this group, so set the index to zero
+    $('input.field-weight', tableDragObject.rowObject.element).val(0);
+
+    //find the row's group to pass in to the each function for comparison since we only want to affect the
+    //weights in this same group
+    $(tableDragObject.rowObject.element).nextAll('tr').each(function() {
+      if ($('input.field-weight', this).hasClass(newClass)) {
+        //let's make sure we grab an actual sibling
+        var prevRow = $(this).prev('tr');
+        //alert("Prevrow length: " + prevRow.length);
+        //alert("This indents: " + $('.indentation', this).length);
+        //alert("Indentation length? " + $('.indentation', prevRow).length);
+        while (prevRow.length && $('.indentation', prevRow).length > $('.indentation', this).length) {
+          prevRow = prevRow.prev('tr');
+        }
+        var prevWeight = $('input.field-weight', prevRow).val();
+        var incWeight = parseInt(prevWeight) + 1;
+        $('input.field-weight', this).val(incWeight);
+      }
+    });
+  }
+  //TODO reorder weights from previous group
+
+  //debug code for outputting object elements
+  /*var str;
+  var thingy = siblingIndent;
+  for (item in thingy) {
+  if (String(thingy[item]).search(/function/) == -1) {
+  str += item + " = " + thingy[item] + "   ";
+  }
+  }
+  //alert(str);
+  var str2;
+  var thingy2 = siblingWeightFieldDown[0].value;
+  for (item2 in thingy2) {
+  if (String(thingy2[item2]).search(/function/) == -1) {
+  str2 += item2 + " = " + thingy2[item2] + "   ";
+  }
+  }*/
+  //alert(siblingIndent);
+  //alert("Old group: " + oldGroupName);
+  //alert("New group: " + newGroupName);
+}
\ No newline at end of file
diff -rupN theme/theme.inc theme/theme.inc
--- theme/theme.inc	2008-10-28 23:12:09.000000000 +0100
+++ theme/theme.inc	2009-01-22 01:13:14.000000000 +0100
@@ -28,6 +28,7 @@ function template_preprocess_content_fie
       $add_rows[] = $key;
     }
   }
+  $parent_list = array('top');
   while ($order) {
     $key = reset($order);
     $element = &$form[$key];
@@ -48,7 +49,15 @@ function template_preprocess_content_fie
     $row = new stdClass();
 
     // Add target classes for the tabledrag behavior.
-    $element['weight']['#attributes']['class'] = 'field-weight';
+    if ($element['#row_type'] == 'group') {
+      $parent_list[] = strtr($element['group_name']['#value'], '_', '-');
+    }
+    if (empty($element['parent']['#value']) || !isset($element['parent']['#value'])) {
+      $element['weight']['#attributes']['class'] = 'field-weight field-weight-' . 'top';
+    }
+    else {
+      $element['weight']['#attributes']['class'] = 'field-weight field-weight-' . strtr($element['parent']['#value'], '_', '-');
+    }
     $element['parent']['#attributes']['class'] = 'group-parent';
     $element['hidden_name']['#attributes']['class'] = 'field-name';
     // Add target classes for the update selects behavior.
@@ -82,10 +91,13 @@ function template_preprocess_content_fie
   $vars['submit'] = drupal_render($form);
 
   // Add tabledrag behavior.
-//  drupal_add_tabledrag('content-field-overview', 'match', 'parent', 'group-parent', 'group-parent', 'field-name', FALSE, 1);
-  drupal_add_tabledrag('content-field-overview', 'match', 'parent', 'group-parent', 'group-parent', 'field-name', TRUE, 1);
-//  drupal_add_tabledrag('content-field-overview', 'order', 'sibling', 'field-weight', NULL, NULL, FALSE);
-  drupal_add_tabledrag('content-field-overview', 'order', 'sibling', 'field-weight');
+  drupal_add_tabledrag('content-field-overview', 'match', 'parent', 'group-parent', 'group-parent', 'field-name', TRUE, 10);
+  foreach ($parent_list as $parent) {
+    drupal_add_tabledrag('content-field-overview', 'order', 'sibling', 'field-weight', 'field-weight-'. $parent, NULL, TRUE);
+  }
+
+  // Override methods in Drupal core tabledrag.js.
+  drupal_add_js(drupal_get_path('module', 'fieldgroup') .'/fieldgroup.tabledrag.js');
 
   // Add settings for the update selects behavior.
   $js_fields = array();