Alright, I was playing around, and I was trying to add group names I didn't already have, and then all of a sudden it was taking them. What is the error when you try to add groups with groupadd? I was getting error's, then going back trying to add the same group name again, then it was telling me the group already exists. Hmmmmmm
Let me know.....Also this is within RH 7.0 as well.