Why does VPC 7.0.2 ask for a "Workgroup name"?

[HalleluYAH]

Please help me find the answers to these 3 questions (listed below) and please look at that image I pasted, in reference to my questions:
1. Would any of you tell me how important a "Workgroup" name is?
2. I don't think I have a domain name, but I know I am on a network (DSL/Cable), so does the name of my "workgroup" effect how I connect to the internet with Virtual PC 7.0.2.?
3. Would any of you please give me 1 or more examples of a "workgroup", or list some generic names of workgroups so I can find out whether or not I have something similar listed on my LAN/Local Area Network settings-section?

Here's the image that caused me so much confusion:

 

[SC68Cal]

It asks because it's part of the windows installation.

You can leave it at it's default without worry, since if your friend is wondering about what it is, chances are he's not using it for anything.

It's just a way of grouping together windows machines into groups so that when you browse your Network places machines are grouped together logically for file sharing purposes.

 

[HalleluYAH]

SC68Cal, thanks for helping me understand what I needed to do with that workgroup.