Hello Martin Perlin,

Yes, normally it will go to registered group when the user register in your site. You also can set the default from your backend > User > User Manager > Option > New User Registration Group ( http://screencast.com/t/flfPoIDHiX )
Hope this help.

We are using Joomla 2.5, I don't find the "Users Configuration" area in our backend. Can you help point out where to find this.

Hello Martin,

Did you login with SuperAdmin privilege in your Joomla backend? I have try to attached the screenshot http://screencast.com/t/JbVFFv7JKw , hope this help.

Thanks! Found it.

Thanks for updating Martin