After naming your group, browse for contacts you want to add to it. You can find them by clicking "All Contacts" or by searching by name or email address. Once you locate the contact you'd like to add to your group, click on the contact name, and select the "Groups" drop down menu in the right-most pane. You can add any contact to a group this way -- or make impromptu new groups. (You can also add people to groups by clicking a group name and then typing email addresses or names in the search box at the bottom of the middle pane).