There are whole books out there that help you decide which division to use, depending on the purpose (The MBTI Teambuilding Program by the Hirshes is excellent).
In a nutshell, for many applications, 16 types is too many for team members or workshop participants who are new to type to grasp thoroughly enough to make use of them. Because the preferences are about energy source (E_I), Information needs (S-N), Decision style (T-F), and approach to life (J-P) one chooses the grouping based on purpose AND on who is in the group. For example at one school I worked with, only the principal had NT preferences. Grouping by function pairs (ST, SF, NF, NT) would have isolated her in an unhealthy way, so I chose a different grouping.
Here's the gist of most common purposes:
Quadrants (IS, IN, EN, ES): learning styles, change
Function pairs (ST, SF, NF, NT): communication, careers
Temperaments (SJ, SP, NF, NT): leadership, work styles
Dominant functions: problem solving, influencing, communication, spirituality
Last two letters (TJ, TP, FJ, FP): conflict resolution
Attitude/orientation (IJ, IP, EJ, EP): work styles
edcoaching, INFJ
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