When you create an event you should see this window:
Click on "Add Invitees...," and enter the email addresses, or group names. This will allow you to use contacts/groups in your Address Book application.
My use case is this: I have an existing meeting scheduled, I have to send an update or a conference bridge, something, to all the attendees. At work in Outlook I can right click and get an option to Reply to All and it brings up an e-mail that has all the invitees pre-populated in the TO field.
I would like to second the need for this feature in iCal - for use in a business environment, its a must and its a pain in the **s today to have to manually send the email and reference the meeting. A prime example is that I often have a document or presentation that is completed shortly before the meeting, and would like to distribute it to all attendees. A reply to all for an ical event makes this easy and you don't have reference what meeting it is for, its implicit.