I've done a fair bit of riding in groups so I thought I knew the answer, but I went along to LAM's Group Riding Day on Saturday to make sure, dragging an even more experienced biker friend from down South along to witness how different things are in London (we have motorways! and white vans!).
There are two methods for ensuring everyone reaches the same destination by the same route at more or less the same time: the follow-on system and the drop-off system.
Using the follow-on system, you're responsible for the person behind you. Depending on the nature of the ride you either keep them visible in your mirror at all times, so that the whole group stays together and if anyone falls behind everyone comes to a stop, or you wait for them when you come to a junction.
With the drop-off system, when the leader approaches a junction they point at the spot where they want the rider behind them to mark. Number Two stops and indicates which way the leader has gone. The marker stays in place until everyone has gone past except the last rider, then slot themselves in front of Tail-End Charlie, so they've gone from second to second-to-last.
Only the leader and tail-ender stay in the same place throughout - everyone else keeps swapping round. This system allows the ride to get more spread out and is useful if there are different kinds of bike and varying abilities among the group.
On Saturday's course we refined these techniques, learning good and bad places to drop a marker and how to signal a right turn in a way that won't make car drivers think you're pulling out or get your arm taken off by a wing mirror. As a bonus we got a nice ride in good company, not to mention a little badge at the end.
At one time or another I've been in every possible position (fnarr), and personally I like being the tail-gunner best; there's no pressure from behind and you can watch what everyone else gets up to. In biking, it's not true that unless you're the lead dog the view never changes.