From what you described you may have osteoarthritis in your hip. This is a degenerative disease of the cartilage and bone tissue of the bearing surfaces of the articular joints. It can be particularly painful for the weight-bearing joints (hips and knees, less commonly the ankle joint). In the hip it is usually (not always) a deep groin pain where bursitis is closer to the lateral surface of the hip. A simple x-ray will be necessary to diagnose the condition of you hip joint. As the cartilage lining the joint degrades and erodes away the bony surfaces of the joint will migrate towards each other causing a lessening of what's called the joint space until enough is worn away that you achieve a condition mentioned in a post above called bone-on-bone. This is easily seen in simple planer x-rays. Here is a link that will explain all this:
Hip Osteoarthritis - OrthoInfo - AAOS
Several things to be careful of: injections - there are two types. One is called visco-supplimentation. This is an injection (actually a series of injections) of hyaluronic acid which is a very viscous natural substance that is found all cartiagenous joints. These injections are used more in the knee joint than the hip and can give some temporary relief of pain and improve mobility. There is no real down side to this other than cost. It will not cure degenerative joint disease. The other injections consists of corticosteriods. These injections contains both a analgesic for pain relief and a steroid to lessen the inflamation caused by the arthritis. These are also give temporary relief but there is a limit to the number that you can receive because there are several adverse effects to the steroids. And most surgeons will not perform a hip arthroplasty until some months after your last last sterioid injection.
A couple of other things to keep in mind. Hip surgery is very effective, and the implant products are good enough that the arthroplasty may the rest of your life. Lose weight - if you are over weight the extra load on the joint will exacerbate your pain and the degenerative process. Exercise and stretch as mentioned in previous posts. This may give some relief of pain and if you do need surgery it will lessen the recovery time. Don't smoke or drink to excess. Besides affecting you health in general smoking and drinking adversly affect the healing process and possibly the long-term outcome of the surgery.
There you have it. Go see you doctor and good luck!