I figured out a way that people can group people they are following in Google Buzz into groups.
I noticed that as I began following people in Google Buzz that they began showing up in the Google Reader "People You Follow" section. Here are the steps you need to do to start grouping people.
 

I found this fascinating quote today:

 So it looks like Twitter is going to be handling this using "Lists" .
TWEET: RT @andybeal Be Warned, Twitter Lists Will End in Tears!http://bit.ly/edRfS
and see Twitters blog entry here:
http://blog.twitter.com/2009/09/soon-to-launch-lists.html