It appears that with WP 3.1's new network admin, you cannot access the Groupblogs menu to do the configuration. It stopped me in my tracks and I had to change back to 3.0.1 on my development site.
Per this link on the buddypress.org site -
http://buddypress.org/community/groups/bp-groupblog/forum/topic/no-bp-groupblogs-menu-under-buddypress-menu-in-network-admin/#post-94775 - there's a fix for the issue now. Hoping this helps out a bit, kudos to RonaldZW for posting the fix!