I believe that presently the only solution to this issue is to create a distinct role for the people who need to see the second module, rather than using the Registered Users role.  According to a recent blog post (http://www.dotnetnuke.com/Community/Blogs/tabid/825/EntryID/1782/Default.aspx), Cambrian will include "deny" permissions, which is what you are really wanting here (the ability to deny members of your group the ability to view Module 2).

Sorry I couldn't be more help,

create two modules, one visible to registered users with private content and one visible to unauthenticated users only (showing message to login).

Admins will always see both modules, but registered users only second one.

Besides, you can download Magic Content module from the Forge, which has the option to provide separate texts per target group.

Both those suggestions would be just for two types of users, not three.  

Ok I tried using SW.Text 1.0.1 from snowcovered and this does not get me what I need.

The big problem I am facing is that all users become registered users once they register for the site. This causes a problem because they are part of that group always, along with the groups they have rights to that we assign later. I want three seperate messages to show, but a user can only see one of them. Unregistered, registered, and group 1. Problem is, group 1 can see registered message as well. I need a way to deny this inside the module or somehow to get this to work. I need it so that if you are part of group 1, then you cannot see registered.

This module had a deny on the module level, which did not help me, I need it per group inside the module.  

If you have any suggestions I would appreciate it.

Thanks,