The main advantage is the ability to set more granular rules.

And compiled audiences  are much faster, and affect your domain
controllers less because it goes to the profile store for the audience,
and not your AD GCs.

Informationally:

It appears (sometimes??) even AD Groups don't work for Audiences unless
the profile import has imported membership  information.

Is it still going against the Active Directory servers?

Try adding objectclass=group to the import string. Something like:

(&(objectCategory=person)(objectClass=user)(&(objectCategory=group)(obje
ctclass=group)

It needed an Or operator at the beginning

(|(&(objectCategory=person)(objectClass=user))(&(objectCategory=group)(o
bjectClass=group)))

What does this do for me (I already understand it imports the users  and
groups. What does that mean for memberships, audience, and sharepoint)

It should allow all AD groups  to be available to build compiled
audiences.

Thanks for the tip on the Or operator.

They were available before (by association to the profile)

But even with the new filter string I still have to re-import profiles
after I add users  to AD groups  before they will compile  into the
audience.

What is interesting now is that DOMAIN\GroupName has a personal page
within mysites.

Also, audience  memberships don't expand AD groups-within-groups. If you
want to be included  in the audience you have to be a direct member of
the group  specified in the rule. (this isn't too bad because you can
always add another rule, but it is extra work to maintain it in two
places if you're using AD this way already.) I wish it was smarter than
that.