No, the useradd is a linux/unix OS command (not cobalt), and will not create the default home page, or put the user in the cobalt database, etc. I think there is a CLI command for adding a user so the cobalt will pick it up, but I am not sure about it. Someone else may fill you in on that.
Jeff Bilicki made the shell-tools package (unofficial, not supported by Sun - not that it matters now) that adds CLI user/vsite add/delete/suspend/unsuspend capabilities. I think it's on all the boxes by default, including XTR. If not, the PKG is on ftp://ftp-eng.cobalt.com/pub/users/jeffb I think.
The "new" command is cadduser, etc, I believe. Do "man cadduser" to see how to use it (also caddsite, etc).