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I am looking to start reading some 40K Novels. Since I am building a Necron army I would love to take in some of their fluff. I believe Fall of Damnos features them, but are there any others?

Out of curiosity, have you read the codex cover-to-cover?

I've always enjoyed codex fluff, and since Necrons aren't particularly featured in 40k novels, the codex fluff is an important piece of their backstory.

I have, I enjoy it and I would like to read some more. I know the Necrons are the enemy and therefore probably take the back seat the the marines, but I am still interested.

The novels I know that Necrons are in are:

Nightbringer by Graham Mcneil
http://www.amazon.com/Nightbringer-Warhammer-40-000-Novels/dp/1844161633

Caves of Ice Sandy Mitchell
http://www.amazon.com/Caves-Ice-Ciaphas-Novel-Warhammer/dp/184416070X

Dark Apostle - Anthony Reynolds
http://www.amazon.com/Dark-Apostle-Warhammer-000-Novels/dp/1844165078/ref=sr_1_1?ie=UTF8&s=books&qid=1303394348&sr=1-1

Also, check out the Xenology, if you can find a cheap copy some where
http://www.amazon.com/Xenology-Research-Bestiary-Biegel-Warhammer/dp/1844162826/ref=sr_1_1?s=books&ie=UTF8&qid=1303394092&sr=1-1

They are also featured in the Dawn of War Novels. I don't know of any others, but hopefully someone else will chime in with something I haven't read.

Dead Men Walking heavily features the Necrons as an opponent to a planetary PDF and the Death Korps of Krieg.

New novel: The Fall of Damnos by Nick Kyme
http://www.amazon.com/Fall-Damnos-Warhammer-40-000/dp/1849700419/ref=sr_1_1?ie=UTF8&qid=1303404135&sr=8-1

Also a tidbit in the second story of the Deathwatch adventure "The Emperor Protects".

Dead Men Walking is awesome. Very 40k. I recommend it.

The upcoming next 40k Codex
Fall of Damnos seems to "preview" some of the new background and characters of the upcoming Codex.

Dead Man Walking also included Necrons as the main enemy.

Nominally, Nightbringer includes something from the Necron Codex, but you learn barely anything about them actually. Same with Dark Eldar featured in the book. So I wouldn't recommend it.

Haven't read the others.

BTW you learn quite something about Necrons by playing Dawn of War: Dark Crusade, esp. how units move and how Necron terrain looks and behaves.

http://www.blacklibrary.com/Home/Search-Results.html?filter_type=6&filter_Action=0&filter_name=SearchTerm&submit=GO&filter_value=necron Where they have a more major role outside of nameless evil

Well I wrote down the list and headed to Waldenbooks. The only one they had was Fall of Damnos. Hopefully it is worth the $12 pricetag.

They are also featured in two different short stories of "fear the Alien."

The stories with the IG, the Dark Eldar, and Tau were all fantastic. What's interesting is the part of the book that dealt with Space marines (Salamanders, if I remember correctly), was completely uninteresting to me, but the other side of the story with Chaos Marines funneling genestealers towards the Salamanders was awesome.

Sweet lord is Damnos worth it. We get a whole bunch of pages from the view of the Necrons and a few new unit types mentioned throughout the book. I think you'll like it alot as it manages to have some epic moments involving the ultramrines and the Necron forces that are actually well done

There is another book that was not mentioned so far: Hellforged. It's the last book in the Soul Drinkers Series, only read that one for the Necrons feature. Don't know about the main characters since I didn't read the other books, but I thought the Necrons were portrayed very well.

I am enjoying it so far. This is the first I have read anything about space marines. I don't even own the rules book yet, just the Necron Codex. What do I need to know about ultra marines to better understand what it going on?

I think they've all been listed but just for future reference (incase you want to read more books about other races) I'm sure the Black Library website allows you to search for books featuring a specific race in them