I have found Separate Group Forums quite useful for this purpose too, and a lot simpler to use.
I got the students to email me the names of the group, and when I had them all set up an Excel spreadsheet with the groupname and description which contained the names, saved it as a .csv files and then uploaded the csv file into the course using the Import function.
Then all that has to be done is add the individuals to their groups. I've attached a starter file with one dummy group in it for you to add your groups. It will save all the to-ing and fro-ing between screens.
Once the students are in their groups you set up a separate groups forum, and either get them to start a discussion in their private group and not the course group, or start the discussion for them so they don't accidentally start one for the whole class group.
When you have a separate groups forum, a box with drop downs appears in the top left of the area where you add a discussion.