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At Brighton & Hove we have a seperate budget for purchasing book group stock (£3000 per year), which we use to buy sets of 10 copies of appropriate books - chosen by book groups across the area and by our reader development librarian.
 
They are used by our 9 library based groups and by approx 40 independant groups, and can be booked up to a year in advance.  We lend them to one named user per group, for a period of 6 weeks plus, dependant on what the group needs.
 
Books stay as book group sets (stored separately from general stock) until they are no longer being requested - this can be never for the most popular titles! Once they are removed from reading group sets if they are in good condition they are added to general stock, and if not they are deleted.
 
We operate a database to keep track of where the books are and when they are due back to allow for advance booking.

We don't have a reading group strategy as such but we have standard operating procedures which we follow.  We provided training to support staff involved in reading groups and I maintain regular visits and monthly contact with staff running the groups.  These groups are our first port of call when we are doing any consultations with library users.  My newest group is one at Jubilee Library, there are people in their twenties (some students), 5 men out of 12, some retired people, we have great discussions from this group!  I also run a Lesbian and Gay book group whilst my colleague is running a Teenage book group.

The groups do make a lot of suggestions and comments, mostly informally and there are propbably more ways I could involve them to be honest, will make a note to self to try harder......