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If you are still in the old email format, open the address book from the Inbox page, and then select the contact. In the toolbar above it, you will see the option to add it to a group. If you are in the new format, try to drag and drop it from the list over to the group folder in the left pane.
In this NEW and unfriendly format, I can't even drag the contact from the address book to the group that I want to....plus no way that I can figure out how to add an address to an established group..