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yeah.

What exactly are they?

Genestealer's are scout creature's of the tyranids.
They infect a local population and gather in cults.
As scouts, they hide their real appearance as long as possible, to undermine a civilization and prepare the planet
to be consumed by the Tyranids.
The cults and its lords are neccessary to combine the efforts of the genestealers.

Should be as secretive as any other cult. And have a leader, as usual.

http://en.wikipedia.org/wiki/Genestealer

1handhq pretty much got it right. But its a slow process. Once members of a human populace are infected, a few generations of reproduction have to occur. The first offspring are largely human, with subsequent generations more tyranid like, gaining claws and chitinous areas on the subject. Finally, a "purestrain" genestealer is born, which is pretty much all bug. At this point, the cult send a psychic signal into the warp, luring the Hive fleet to the planet for consumption.

"Duty Calls" in the Ciphas Cain series is a good book to read on the subject.

Look at pages 84-115 in the "WARHAMMER 40,000 compilation" for Rogue Trader for in depth information on Genestealer cults.

Hope that helps.

Actually, it's kinda' backwards.
1st and second gen stealers look like purestrain.
3rd gen are hybrids that look like a horrible cross between human and 'stealer.
4th gen stealers look almost entirely like the parent race, but are hairless, pale and have an "unnatural character to their eyes". The infamous genestealer Magus is from the 4th generation.
5th and subsequent generations simply repeat the process. (5th is 1st, 6th is 2nd, etc.)

When a genestealer attacks a person, they implant a seed which subverts the persons ability to think for themselves, basically enslaving them to their attacker.
When they bear children, the child is a genestealer, as above.

I think we're done here.