B\"acklund Transformations and Loop Group Actions
  We construct a local action of the group of rational maps from $S^2$ to $GL(n,C)$ on local solutions of flows of the ZS-AKNS $sl(n,C)$-hierarchy. We show that the actions of simple elements (linear fractional transformations) give local B\"acklund transformations, and we derive a permutability formula from different factorizations of a quadratic element. We prove that the action of simple elements on the vacuum may give either global smooth solutions or solutions with singularities. However, the action of the subgroup of the rational maps that satisfy the U(n)-reality condition $g(\bar\l)^*g(\l)=I$ on the space of global rapidly decaying solutions of the flows in the $u(n)$-hierarchy is global, and the action of a simple element gives a global B\"acklund transformation.   The actions of certain elements in the rational loop group on the vacuum give rise to explicit time periodic multi-solitons (multi-breathers). We show that this theory generalizes the classical B\"acklund theory of the sine-Gordon equation. The group structures of B\"acklund transformations for various hierarchies are determined by their reality conditions. We identify the reality conditions (the group structures) for the $sl(n,R)$, $u(k,n-k)$, KdV, Kupershmidt-Wilson, and Gel'fand-Dikii hierarchies. The actions of linear fractional transformations that satisfies a reality condition, modulo the center of the group of rational maps, gives B\"acklund and Darboux transformations for the hierarchy defined by the reality condition. Since the factorization cannot always be carried out under these reality condition, the action is again local, and B\"acklund transformations only generate local solutions for these hierarchies unless singular solutions are allowed. 
Chuu-Lian Terng and Karen Uhlenbeck