Because I'm returing to photography after quite a hiatus, I used to use all manual focus cameras (e.g., Nikon rangefinder and SLR) and at first found autofocus a problem in low light. Here are a few things I've picked up. Autofocus needs more contrast than your eye can pick up, so low light can be a problem. The top cameras seem to do better but you're not alone with a problem.
The first thing, of course, is what you're doing, so long as you get the full joy out of memorizing your manual and learning what options you have, and how to hold the focus from off-center when you re-frame your shot. Of course if you use the manual mode you won't need to do that. (So far as I can tell manual mode in autofocus isn't really the same as in my old Nikons or Mamiya TLR; maybe someone will correct me here.)
I don't know if your camera supports focus bracketing (one of mine does and one doesn't).
Autofocus lenses tend to have two problems of their own. It isn't nearly as easy to understand the focusing zones you have with a given aperture. You might look into this, maybe in the manual (Nikon used to be very clear about this). The second problem is they tend to be slow, and the faster the better for focusing. Kit lenses, anyway, are really slow. You might consider the 30mm f/1.4 from Sigma, for example. I guess digitals have an advantage if not full frame in that lenses are shorter and hence have greater depth of field.
Lastly, I know you want to get the focus right first off as you might miss the best shot otherwise, but I would think that your camera would have a way to zoom into the shot when you review it; it's impossible to tell from the regular LCD image.

It's possible my comment on considering the 30mm f/1.4 lens could be misleading. The value of the 1.4 (or even an f/2) is easy of focusing, not shooting wide open as you want to stop down if you can to get more depth of field. This in turn brings up the issue of ISO. Because you want a smaller aperture you want to shoot at the highest ISO your camera can manage without undue digital noise (assuming you can do some post-shooting adjustment with software). You also can consider the tradeoff with shutter speed as it could be that some of those settings entail a faster one than you need. Lastly, I suppose, you could consider flash.
I apologize if some of my points are overly basic, as I tried to mention all the various factors I could.

The problem may not lie with the subjects not being in the center of the frame so much as the subjects not beeing in the same PLANE. In program mode the camera will choose a hand hoodable shutter speed and the widest aperture concomitant with the iso setting. If the aperture is too wide not all of the subjects will be in focus unless they are lined up shoulder to shoulder in army formation; any one behind or in front another by a couple of feet will be out of focus at wide apertires.
In general for group shots, F8, 1/125 sec at any iso that will give you these parameters will work with all but the longest lenses.
Try to pick up a copy of Kodak's "Joy of Photography"; it covers the basics of exposure and the effects of camera settings decently.

I THINK I understand what you are describing

you are saying that when a person is not in the center of the frame its tough to get the camera to focus on the person and NOT on whatever is in the center of the frame?

if that's the case then you need to check a few things..

1. make sure that the AF sensor you are trying to use is properly selected. I dont own a D50 but I have a D70 and D2X so I know that its not uncommon to accidentally hit the dial on the back and cause the camera to start using a far left or right sensor when the one I wanted was in the center..To identify which AF sensor is being used...compose a pic and half depress the shutter. One of the sensors in the viewfinder will show as red while the other ones are black. This is the one being used to establish focus. I would suggest that you select "single area mode" and then make sure the center AF sensor is the one being used. You can practice with other setups as you get more used to the camera.

2. read your manual and identify the AF-L button. Its on your camera in plain sight... but what you do is point the camera at the subject you want to be in focus......focus on him with the center AF focus area... then hit the AF-L button and hold it...then recompose and snap the shot. I know it sounds like a lot but I find this method is very fast when you get used to it and a lot easier than switching from one focus system to another...its also ALWAYS accurate while other focus schemes can sometimes work erratically.

thanks for all of the information!! as you can tell i am still green. I just got the sb600, will then truely help that much with focusing? Thanks again for all the help.

I'm not sure about this with a DSLR, but with the CoolPix cameras, the auto focus would focus on the closest thing in a picture that was within the range of the auto focus. That would explain why your people weren't in focus but centered in the frame. That also explains why the cameras need to allow you to choolse the zone that the auto focus works in.