How To Implement Group Policy In windows 2003 server

Hai,
I have 25 XP Pro client pcs with one windows 2003 server. Each user is pertaining to each department like sales,purchase etc.

I want to create Group Policy for each deaprtments and apply to them. What is the starting step to create the group and policy.

I tried myself, but it is not effecting in the XP pro client pcs.

Please help Me….

Siva