Re: Can not create groups…..
Do you have any plugins other than BuddyPress installed and activated? yes… Really Simple CAPTCHA, WP-Cumulus, and Google News XML Sitemap
The first thing to do is disable all plugins except BuddyPress. With new installs, you should always fully test WPMU and BP and make sure that everything is working before adding more code to your setup. Installing and activating additional plugins is adding more code.
If the issue resolves, then it is more than likely a plugin conflict. You then need to determine which plugin was causing the issue.