The group and lookup Tab allows you to pre-define selected groups to synchronize (which are named A2O Groups) or Lookup fields to use when selecting contacts to synchronize. You can view the contacts that are defined by these fields by clicking on the View->A2O Groups or View->A2O Lookup option.
Enabling the Synchronize Sub-Groups option, ACT-Outlook Synchronizer will sync all the subgroups belonging to the selected group.