When adding a user, there are several steps to be taken. First, the user must be given an entry in /etc/passwd, with a unique username and UID. The GID, fullname, and other information must be specified. The user's home directory must be created, and the permissions on the directory set so that the user owns the directory. Shell initialization files must be provided in the new home directory and other system-wide configuration must be done (for example, setting up a spool for incoming e-mail for the new user).
While it is not difficult to add users by hand (I do), when you are running a system with many users it is easy to forget something. The easiest way to add users is to use an interactive program which asks you for the required information and updates all of the system files automatically. The name of this program is useradd or adduser, depending on what software was installed. The man pages for these commands should be fairly self-explanatory.