Good morning folks, again thank you for the great replies. However, my apologies as looks like I've given you guys a bit of dis-info as far as pH levels. I've retested again this morning and in the normal daylight it does look to be be perfectly at the 7.8 level.
Chlorine looks to be at 5ppm or maybe just slightly above.
I did add another quart of bleach in this morning and left pool uncovered for the day. Hopefully chlorine levels will go down enough for my kids to use the pool in the evening. What should be good chlorine levels for them to use the pool and not burn their eyes and stink up everything with chlorine?

As far as the granulating chlorine that I have. How do I get it into the pool? If I just poor the power in it just settles at the bottom and discolors the liner... The box says I can't dilute it before applying either. Is there a method to this I can use?

And one more question. Should I shock the pool in the weekly basis? If so what do I use, since you said to not use hth shock 'n swim...?

Learning a lot here. Hopefully by the time I get a real pool in the spring I will know everything about this!