Looking at the marketing material for Salesforce, especially the edition comparisons, the differences between the Salesforce versions are very high level. However there are a few key things missing in Group Edition that make it very limited compared to Professional edition, and unless you are selling Widgets, there is not much in Professional edition that makes it worthwhile. The only edition that is really worthwhile is Enterprise, but the price is usually too high for small business.
I moved the rest of my question into an answer to make it a community Wiki Post
My sincere advice to companies who say they can’t afford enterprise addition is: if you can’t afford or justify the price of EE, don’t use Salesforce.
GE is pretty close to useless, especially for the price; PE starts getting more useful but is still very crippled compared to EE.
IMHO every client I’ve seen whose budget and feature needs are below that of EE should be using something else – usually some combination of contact management, reporting, service management, collaboration and task automation. Salesforce has some offerings in that realm, like Desk.com & Go.com, but there are many others out there.
I really wish Salesforce changed its outdated and confusing pricing model – I’ve met way too many clients who refuse to ever use Salesforce again because they used to be at a company that cheaped out on Group Edition and were disappointed.