Hi RLPopeIII,
I don't have much experience with Option groups, but if you want to insert/remove XML nodes on the drop-down event, the only way I can think of doing this would be by using code. Just put an OnAfterChange event handler on the drop-down, and then when it fires check the value, and then insert/remove XML as appropriate.
Hope this helps!
Matt Faus / Microsoft InfoPath MVPQdabra® Software / Streamline data gathering to turn process into knowledge