Adding someone to the moderator usergroup does not make them a moderator, it only gives them some forum moderator permissions. To make them a proper moderator (giving them the staff banner, access to the moderation queue etc) you need to add them as a moderator in the ACP.
As I only have global moderators (moderate the whole site, not just specific forums) I add mine in the ACP but don't give them any permissions on that screen, I add them to the moderator group to give them these. That way if I ever need to give more permissions to my moderators (as I'm about to do with some new Xen Media Gallery Permissions) I can do it once in the moderators usergroup rather than to each moderator individually.
When a post is moderated for any reason, it goes into the moderation queue. This as accessed through the link in the bar right at the top of the forums if you are a moderator. If you don't see this bar, then you aren't a moderator and can't access it.