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We recently updated an intranet web site to Sharepoint. Some of the groups created have muliple permission levels e.g. Contribute,Limited Access. I know that There are Site Permissions, List Permissions, and Personal Permissions but how does an assignment of this type relate to access for each of these if at all. All of our groups are inherited from the top site so would some with Contribute,Limited Access give them Contribute to all sub sites and what role does the Limited Access play in this case?

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Limited Access typically comes into play when someone has broken permissions inheritance at the list/library level and is using unique ones. Perhaps those users were reduced to read only at a particular list, and that's where you will see limited access come into play.

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