Group work should not be solely used for projects or creating other products. Having students collaborate during each lesson improves their learning and lets students actively work towards reaching the shared goal (learning objective), each one according to the skills they have, while also getting help for the areas of learning that need improvement.
Many teachers already know the benefits of using students to help each other and have used group learning for years. I just wish to emphasize the effect of group learning for three main reasons:
Everybody gets (has) to be an active participant in learning
Peer tutoring is very effective tool for understanding
Hearing your own voice say things aloud makes a different pattern into your brain (that is why we believe what we say aloud)
I prefer using groups of three students, because at best they end up in a heterogenius situation where at least one disagrees and they must think what they really know about the topic, in order to get into an agreement of it. Very valuable tool. Also when the group size increases there is a tendency of some students becoming bystanders, which of course makes learning harder for them.
Peer tutoring derives from Vygotsky's theory (usually called ZPD - Zone of Proximal Development) and at simplest it is about a bit more advanced student (usually sibling in Vygotsky's work) helping out with a task that is not within the reach of the "trainee", but just above it. When students explain things to each other they use the vocabulary on their own shared level and because of that they often gain deeper understanding of the topic (taken that they have the basics right, of course).
The brain researchers have studied different patterns and pathways in human brain input for many years. One of the amazing findings is that hearing your own voice say things aloud really makes a different mark in your brain. This is of course widely used fact in positive thinking programs and NLP, but can very easily be used as a memorizing and learning tool in a mainstream classroom. However, monotonous repetition does not do the trick, but the student must have control over the words. That is why explaining a thought for a classmate benefits both students.
The most important thing in group working is to make absolutely sure your students know what is expected from them. Verbalizing and printing the sequences and the expected outcome helps them succeed. Using a specific type of spreadsheet or format in class every time there is group work makes it easier for (smaller) students to recall the group work patterns. Group work is also extremely fruitful situation to utilize students' self evaluation and peer evaluation. Both increase the awareness about what teacher expects from them as well as the student's own responsibility in learning.
The real reward for the student comes from realizing how well s/he could carry out the given tasks. If we can feed that experience of succeeding, we have helped that particular student take a huge step towards intrinsic motivation and autonomous learning. And THAT is one of my favourite things in teaching!