Weight painting for everything? I am a bit confused as to what weight painting affects in Blender. The obvious one is that it affects the mesh that is skinned to an armature or bone system, but it also affects the pinning in vertex groups for cloth and I think a lot other stuff in physic systems, also it affects the hair in the particle system and probably a lot more things.

I just don't understand how that works if you combine f.e. a weight painted mesh on an armature with weight painted areas for hair growth. Where do you specify what this specific weight paint is used for? Or can each mesh only be weight painted one way and it affects everything that uses weight paint information?
To sum it up:

Creating a vertex group is just saying that this group of vertex will have this name, it can be useful for several purposes, some groups will be useful to parent the vertices to an armature, others for particles, etc... 

You can create as many vertex groups as you want, and each vertex group is independent from the others. For example some vertices can be part of several vertex groups.

To create a vertex group click on the « + » button on the right of the Vertex Groups list, give it a name and select this group. If you haven’t any vertex group yet and you begin to paint in Weight Paint mode, it will automatically create a vertex group.

To choose the vertices that will be part of this Vertex Group you can either do it with Weight Paint mode with the brush, or in Edit mode with the Assign button below the Vertex Groups list.

A vertice can be only 50% (or 70% or 10% or whatever %) part of a group, it means for example that when you assign an effect to this group, this part of the group will only produce 50% of this effect.

When you paint in Weight Paint mode, only the part that is red, yellow or green (i.e. not blue) is assigned to the vertex group that is selected in the Vertex Groups list. The more the zone is red, the more it is 100% part of the vertex group. The blue zone is not part of this selected group, but it can be part of another vertex group: select the other vertex groups of your Vertex Groups list to check it out.

If you want to create or modify a vertex group in Edit mode, select a group of vertices and click Assign under the Vertex Groups list. The Weight factor will determine how much weight you want to give to some vertices, if you want them to be 100% part of this group (equivalent to red), or only 50%, etc...

I hope it answers your question...