In Crystal Reports XI:
To use the text field Notes in a formula, type the field in your formula rather than selecting it.  Here are some sample formulas using note fields.

If Not IsNull({CnNote_1.CnNote_1_Actual_Notes}) Then "This constituent has a note"

If Not IsNull({CnGf_1Note_1.CnGf_1Note_1_Actual_Notes}) Then "This gift has a note"

Text fields can only be used if it contains less than 255 characters.

If the field is classified as a Memo data type, then the database field is not available for formulas. Crystal Reports considers any database field that is 255 characters or greater, to be a Memo field regardless of its data type in the database.
While a Memo field can be displayed on a report, it is not available for use in any formulas, parameters, grouping, or sorting.

If you are able to see the Note field in the Report Fields list, when creating a formula, then use the Left() function to grab as much of the Note text as you can:

Left({CnNote_1.CnNote_1_Actual_Notes}, 255)

Then insert a group on this formula field.