what setting needs to be changed in the new usergroup though? because if i set the NO "follow forum rules" it mods them and if i set it to yes its going to mod them because each forum is set to moderate new threads
The answer is to not moderate by forum, but by usergroup. Change the setting that now moderates all threads in a forum. Then, make your default usergroup have the setting that says "always moderate this group's posts" set to YES. Then you have another group, not the default usergroup, and set that same setting to NO. You can put whomever you want in that 2nd group, and their posts won't be moderated.
I am also looking for a hack to do this. There are no default settings to make only certain groups have unmoderated threads but not unmoderated posts. Anything out there?