can't add groups to groups?

in XP pro sp1a I am not able to add other local groups as members of a local
group? I can in win 2k. I assume this can't be by design so whats wrong with
this machine?

machine is a member of a 2k AD domain. I can add domain groups to local
groups but I cannot add other local groups to local groups. In the xp
interface after clicking the 'Objects' button where you would check off
'Users', 'Groups', or 'Builtin Security principles', the 'Groups' option is
not there unless you are viewing objects from the domain. If viewing objects
from the local machine the only options are 'Users' and 'Builtin Security
Principles'?????

any info is appreciated. Thanks.