What do the initials eV (in German) mean?

What do the intials eV really mean? You see them at the end of a social/sporting/kinder group's name. I am assuming that this must give the group/club some special "tax free status" and how and where does one register such a group. Can someone explain please? Thanks.

e.V. stands for eingetragener Verein = registered association. You need to get it registered with the relevant authorities, and minimum requirement for the formation of an e.V. is a minimum of 7 association members and a set of written rules and regulations. An e.V. may not function as a business; as you say, it's more for sports clubs, racing pigeon clubs, etc.

Sure, but it´s a lot of hassle, so it makes me wonder why there are so many of them here. So if you can avoid it, do it. Under German law a Verein/association doesn´t need to be registered, it only helps when proving that the association really exists.
e.V.s by law are non-comercial and the local courts should refuse comercial e.V.s, but that of course depends on the workloads (i.e. if they have enough time to check it) and strictness of your local court.
And e.V.s are not necessarily tax-excempt, you need approval from the Finanzamt, called "Gemeinnützigkeitsbescheinigung". Gemeinnützigkeit means for the "common good", and it´s up to the Finanzamt to decide that. In Baden-Württemberg, associations that have that status are free from court costs and the costs of the notary, but that is state law, so I don´t know how it´s handled elsewhere.
So now to the basics:
e.V.s are registered at the local court (Amtsgericht): You need a "Satzung", which is the statute for the association: it should contain things like how to become a member, how to lose membership, if there will be membership fees, who is able to represent the association, when there will be meetings (usually annual) and how the members will be invited to it, when there´s elections, etc.
Usually, at our court, you could send in your Satzung and we would check if all necessary elements were there, to save later hassle. Check, if your local court would do that, too.
Now you need to hold a constituant meeting, and have at least 7 people sign the statute. You´ll need a protocol of that meeting, too.
Now comes the costly part:
You need an application to the court, stating you just formed a new association and you want to register it, who is able to represent the association, etc.
It has to be signed by the representants and then have a notary approve the signatures, he´ll usually do the application, too. This is about 40€.
Then there´s court fees for the registration and the court will also publish it in the local paper (which you will also pay, that´s probably the most costly part).
And say you want to change your statute or elect a new representant, you´ll also have to have your application to the courts notarized. You´ll also have to send in a protocol, state that the inivitations were done correctly, list the numbers of members who voted for and against the change and how many withheld the vote.
So it´s lot of hassle, and I´ve had a bad conscience more than once when writing the club presidents that we need to have this and that and have it all notarized.

Here´s another link which has more info, an example statute and more stuff you need to know: http://www.marktplatz-verein.de/vereinsgruendung.htm

Thanks very much Reggie and Eolair for your informative responses. You've helped me out a lot.