I started writing an answer to this, but then it got ridiculously long, so here's the gist of it: in the Badar War, the prisoners of war are dealt with in the following manner:

1. a few, like Utbah bin Muth'im and Nadhir bin Harits, are seen as irredeemable enemies of Islam, and were beheaded
2. those who would convert to Islam were released
3. those who refuse to convert must pay a ransom (about 4000 dinars, if I'm not mistaken)
4. those who refuse to convert and can't pay the ransom are enslaved and must teach the Muslims in Medina to read and write for several years

In the Khandar War (in which Medina is encircled by the Meccans), one of the Jewish tribes in Medina, the Bani Quraizah, were killed (males of military age) or enslaved (females and children). Detractors say this is proof of Islamic savagery; proponents say that they (Bani Quraizah) conspired with the Meccans to weaken the defensive line of the Muslims. I will not make value judgement on either.