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It appears as though you can do most things in the Lion Server WebUI (Profile Manager), but I can't seem to be able to add/remove users (or find an answer).

Is this possible?

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Not yet. You can only do this through Server.app or Workgroup Manager, or System Preferences if you're not running Open Directory.

You can create Device Groups through the web interface however.

I highly expect Apple to add this to the web UI in future updates to Lion or 10.8.

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