When using a digital camera to take a picture of a group how do you stop the blur on the people on the outside

You're trying to say the "corners are soft" in the image. The corners tend to look the most out of focus in any lens. You can help this with Aperture Priority mode (Av). You'll want to stop down (use a smaller aperture, which is actually a bigger number). If you shoot in auto mode, it will likely tell you what aperture it's picking, say F/4.0.
You want to choose a smaller aperture, say F/8. SLR cameras can go way down to F/22 and smaller, but most point and shoot cams can't go that far. Try dialing it down all the way. The "cost" of this is that you will need a longer shutter time (can cause blur too!) and / or higher ISO which results in a noisier image.
www.dpreview.com and cruise around, they have a "learn" section on the left bar that may help you.

That is called distortion, it is caused by the wide angle lens.

You will have to step farther away from your group to get them all centered in the sweet spot of the lens. Then crop the photo in photoshop.

Joe

1) Add more light - the camera compensates for low light by decreased shutter speed.

2) Move the camera in the direction they are moving

3)Ask subjects to hold still - or make a diversion behind you so they stop and look back. Firecrackers anybody?

Do you mean that they're out of focus? Because that could be the case. Either extend your depth of field, by closing your aperature, or ask the people in the photo to get closer together.

Your depth of field may be to shallow, you'll need to adjust your f-stop [in aperture priority mode]. Change your aperture [f/number] to a higher number [smaller aperture], like f/16 or f/22. This will increase your depth of field putting the whole shot in focus. If it is not your aperture, or depth of field, it may be vignetting or barrel distortion caused by the lens, if it is a wide angle zoom, such as an 18-70mm. Just zoom in tighter, to about 20-24mm. You may need to step back a little but the barrel distortion should go away.