SharePoint UserGroup Web Service - Retrieve users (nested sub-groups) - sharepoint

We have a need to retreive all users if we know the group name in a SharePoint. We are planning to use the following MOSS out of the web service to retrieve the users from a group. If the group has nested sub groups, do you know how this web service behaves?
Also, does the user accessing the web service has to be a super user having permission to all SharePoint sites? Is this web service based on a site or a document library?
/_vti_bin/usergroup.asmx?op=GetUserCollectionFromGroup
Thanks.

In MOSS you cannot have SharePoint group inside another SharePoint group. You can only have AD groups or users inside a SharePoint group.
You only need to have Full Read permissions to the web application to retrieve this information. You can set this permission by using the stsadm utility.
stsadm.exe -o addpermissionpolicy -url http://myFQUrl -userlogin "domain\user" -permissionlevel "Full Read"

These tutorials may help:
http://blogs.sharepointace.com/post/Another-way-to-retrieve-SharePoint-List-Data-Use-built-in-functionality!.aspx
http://vspug.com/tonstegeman/2007/10/03/export-user-information-to-excel-using-quot-export-to-spreadsheet-quot-in-sharepoint-2007/

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I am not sure if I understand this correctly but I am suggesting you a few things:
Supposing that you have access to the site permissions, you could navigate to Site Settings -> Site permissions (under Users and Permissions). In the ribbon you find the Permission Levels button and once you click it you will go to a page where you can add new permission levels or maybe edit/delete the existing ones.
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I am not an expert with SharePoint and couldn't figure out if this questions has been answered already in SO. So, please redirect as necessary. Thanks!
Customer has a sharepoint farm (syncs with AD) which is a purely OOB implementation and no custom code. That said, the question is - if a user was updated in AD (a property of the user), can the user's permissions on the existing site collection, be modified/reset automatically without manual intervention?
Let's say if
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You cannot with the out-of-the-box web services but there is a custom web service available for free download and source code.

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