for and because

Either sentence is correct, but the use of "for" in that manner would likely be considered archaic by most English speakers. The second sentence is the one most likely to be heard.

A note on punctuation, you actually have a comma in the wrong sentence:

I don't want to go with them, for they are bad people.

but

I don't want to go with them because they are bad people.

This is a correct usage of "for," but not one you are likely to see these days in any except a lyrical context, such as poetry or song.

Thank Setanta..I really should deal with this punctuation thingy.

Don't sweat it, most English speakers (myself included, occassionally) are not always certain about punctuation. In addition, many style manuals in America are conscientiously changing the rules of punctuation, and have been for about a generation.

you usually use a comma where you would pause when reading it

I guess this is relieving a bit . :wink:

For and Because in those two uses are synonymous. They are both serving a prepositional function.