Playing any multiplayer game without chatting is like watching Avatar on your iPhone—just downright sad. So, in order to get the shit-talking going between your friends and party members, you will need get your headset working properly and use Party Chat, which can get a little confusing.
You can create or join a party in several different ways.
You can hit the Snap option on your Home Screen, then go to Party and Start Your Own Party. Find a friend currently online and invite him or her to join. Once they join, you are still not connected to chat. You have to hit Turn on party chat located below the Invite more people option. Now you should be able to hear one another.
You can start a Party by going to your profile (the long vertical tab)...
And going to your friends list and adding friends.
When you find a friend, you need to select their profile and hit Invite to party.
Once they have accepted your invite and joined your Party, remember to Turn on party chat.
To join an Party, follow the same process as above, Home to Profile, but instead of selecting friends, scroll to the right to see a list of active parties under Parties.
Select a party and make sure that your Party Chat is turned on.