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We ended up going another direction, where users can create users in a table outside of XOOPS for a different purpose (outside application that wanted to know about association). The site was only a way of purchasers of the software to group themselves.
However the concept was, users would register, then would associate with other users to form a group. So members from a company would each register their own user, then associate with one person who would be the leader (usually the one who purchased our software for the company). The website was just a new portal for the software.
It could have been done with a group hack, that would allow users to create/join/manage their own groupings. Not sure which makes more/less sense, but we went an entirely different direction either way.
I'm looking forward to the next xoops, you guys do great work. Hopefully I'll be less busy in the future, so I can offer some hand/eyes, just heavily over scheduled at the moment.