How do I remove "Groups" from my navigation bar?

Do I need to delete its image from "Picture Management"?

you mean that you want the "Groupuser" to be disapper from the member if like that you can go to
admin panal > users & groups > special right > Usergroups > chose administation if you don want even moderator to see that

hope that can help you

theres no way to completely remove it. but you can make a pic of 0x0 or 1x1px, transparent gif image as the user-groups button. it will be just like its not there