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I am trying to find a good book outlining how space marines are recruited, then trained. Also I am looking for books that talk about the formation of chapters, any ideas.

Space Wolves Omnibus and Sons of Dorn are both good representations of the recruitment and neophyte stages of a marine's life.

Okay, thank you

Every chapter is different (obviously).

Here was a great one that had a really good walk through from recruiting to becoming a scout.

http://www.blacklibrary.com/warhammer-40000/Sons-of-Dorn.html

errr Ninja'd

The Index Astartes books from GW. You should be able to get them from amazon, ebay, etc ...
Each book (there are 4) is basically a collection of articles that were once published in the White Dwarf. They explain stuff like recruitment and creation of Space Marines, and discuss individual Chapters or specific roles in them. Loads of interesting background.

What you want is probably in the first book: http://wh40k.lexicanum.com/wiki/Index_Astartes#Index_Astartes

They also avoid the "novel distortion" - since 40k does not actually have a "canon", BL writers tend to just make a lot of stuff up as they go, at times clearly contradicting Codex fluff. Also, Index Astartes doesn't "hide" its fluff within a story.