Microsoft Knowledge Base Article 925443 contains the following introduction:

This article discusses Group Policy processing behavior that may occur when you use the Restricted Groups Member of functionality in Microsoft Windows Server 2003 Group Policy objects. For more information about the "Member of" functionality, click the following article number to view the article in the Microsoft Knowledge Base:

810076 Updates to Restricted Groups ("Member of") behavior of user-defined local groups

For more information about the order in which Group Policy objects are processed, visit the following Microsoft Web site:

http://msdn.microsoft.com/library/default.asp?url=/library/en-us/policy/policy/group_policy_hierarchy.asp?frame=true