In the E-Learning and Online Teaching Graduate Certificate program at UW-Stout we like to limit classes to 20. Sometimes we'll get 21 - 24 students and have to make the decision to split the group into two classes or use grouping with a single course. I find that groups of about 15 are perfect. Otherwise I prefer to divide the students into different class sections.
Groups help you achieve a sense of intimacy and reduce the stress students feel when facing large numbers of unread posts.
Here's how I divide students into small groups within the course management system.
I start with a whole class icebreaker, then divide the class by alphabet into balanced sized groups.
I like to ask folks to post to their assigned groups first. Then give them permission to visit and post in the other group if they want. This is a form of differentiation for those high achievers who want to do it all.
At mid-term we change up the groups so everyone works with everyone else.
At the end of the course, in the presentation of projects and journals, we join together again as one class.
This allows 'smaller' discussions, while fostering a sense of overall community.
Additionally, I offer optional discussion threads open to all. This is another differentiation method that allows me to present value added resources on topics that may not appeal to everyone. (In my E-Learning for Educators classes this includes additional research into blogs, podcasting, and wikis.)