Hah. I checked it out, and yes - there is a reported bug exactly as described.
However, I played around with another reported bug - because I didn't know what all this 'sync and verify' stuff was about. After reading THAT bug report, I went back to setup, selected my Yahoo account, selected "Edit", then 'Synchronize all contacts and groups.' Had to go through an approval code process from Yahoo, but after that .... voila! I had the Group Contact options under the NEW menu in all address books.
Hopefully the group option will work as I *hope* it does.
HAH again - just tried it and it worked perfectly!
Thanks for the info!!