What is the best way to use RefWorks for a group project?
The best approach would be to create an entirely new RefWorks account for your joint project--you can have as many accounts as you want. Use the "Sign up for a new account" option on the login page to create an account with a new user name (perhaps the subject of your project) and then a password that you both know. That way you will cite from that database and generate your bibliography from that database.
You can use the Export / Import features found in the References drop down to move the articles from your shared folder into the new RefWorks database.