Grouping Words

[khal]

I was wondering is there an efficient algorithm to group similar words that are only one character off? Like "rat" and "cat"

[useless]

http://en.wikipedia.org/wiki/Levenshtein_distance

[Gulshan Singh]

Look at Levenshtein distance (also known as edit distance) and suffix trees.

I just had an interview with facebook on this and bombed it :(