To scope content in MOSS 2007 using audience targeting, You have three options:
1. Sharepoint Groups
SharePoint Groups are maybe the most obvious Target Audience mechanism. This is useful in situations where the site administrators may not have access to Active Directory, which generelly is the case in large organizations. SharePoint Groups have the nice feature of allowing self-enrollment. Self-enrollment is useful if the site administrator wants to setup a site that have different levels of information and allow the users themselves to subscribe to what components they'd like.
2. AD/Domain Groups
Active Directory domain groups are a valid Target Audience and it works also if you are using a Custom Authentication provider, You just use Custom Role provider as an audience. The advantage is that existing AD groups (e.g for internal use) can be reused in external sites. The SharePoint site administrator has less or no control over the membership in the group, but in large organizations, this is generally the way the security department wants it anyway :-)!.
3: Audience Rules
Audience Rules are very powerful and maybe the least understood. They can be setup to achieve a number of useful things. For instance , they can be setup with multiple rules to require a match to all rules or any rule. The rules can be as simple checking if the user belongs to a organization, is in a distribution list, in a security group or match a specific user profile property.