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This is a bit old, so I hope it's OK that I give my own interpretation on this...

Hastily-made mockup

(With this layout, it would likely be best to have separate matrices for user groups and users.)

• Group names can be changed on the fly (notice that they're all in fields)?
  
• I didn't add it in, but a "Quick check all" ability for rows as well?
  • Alternatively, set it up so that e.g. if I double clicked the Allow value for Edit profile: under the Members group, every other group's setting for Edit profile: would be changed to Allow as well.
• I didn't add it in, but maybe each group could have a gripper at one of the corners, allowing for their order to be changed?
• I didn't add it in, but have the buttons  Update Permissions, Revert to Previous, and Revert to Defaultat the bottom of each individual group?
  • To the bottom right of all of the groups, have the same buttons, except that they affect all groups?
• I didn't add this in either, but have a button to create a new group to the top right of the existing groups (a simple + button, maybe)?  Clicking it would result in a new group appearing to the right of the rest, with its name input field selected.

Edit:  Nearly forgot about how to delete groups! Random ideas:

• Blanking out a group's name and then deselecting its name input field results in a warning appearing above the field, stating that the group will be deleted when the user applies changes to either the blanked-out group or all groups (unless they type a name back in)?
• A simple Delete Group button next to the rest of the buttons at the bottom of each group?