How to create groups and assign users to them using Organic Groups?
Have you read the readme file in og module folder, it shows basic instruction to create a group, assign content to the group. 

Basically, after enabling OG module, you need to create a content type, if you want it to be a 'group', select the "Group Type" option, then each instance of this content type will represents a group.  

Below are some links will help you start:

Basic OG Documentation: http://drupal.org/node/483234

Amitai's presentation of OG7: http://www.archive.org/details/GrouptheNewOrganicGroups-BuildingSocialNetworksInDrupal7    (I recommend you watch this video, very informative. I am sure you will sort it out)