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I want to write about my Tau army, I mean create actual characters! Do you guys know of any books or sources I should read to make my story more appealing and believable to a 40k fan?

This is my personal favorite way to find out more about any 40k lore.

http://bfy.tw/70mv

on a phone so had to shorten the link

Thank you for the sauce boss!

Then perhaps a more prudent question should be. What Tau fiction is considered the best?

I liked pretty much all the stuff braden campell wrote. Aun'Shi, Commander Shadow and Shadowsun: The Last of Kiru's Line.

I guess your best sources are the codex, the farsight supplement (even for tau empire armies), mont'ka/Kauyon, lexicanum and regarding to black library stories i would suggest Shas'o (a collection of Tau short stories)

I'd seriously reccomend the "Firewarrior" novel. Sure, it is cheesy at times, but Kais is a really cool hero and it has a good insight into Tau's fighting society.

Plus it's fun as hell, almost as much as the "Firewarrio" video game. Almost.

I am not a Tau fan. I really hate playing FPS on consoles. However, Firewarrior was a LOT of fun. My brother bought it, not knowing what it was, and I saw Tau and decided to give it a try. There's some really fun gameplay in there. Even doing crazy things like fighting enemy armor. The fight against the Vendetta sticks with me.

I second the Fire Warrior novel, I really enjoyed that novel a lot, one of my favourite for 40k actually, and the author did an impressive job of adapting something which was pretty unbelievable (what with all the stuff he takes down) into something I could actually swallow.

It definitely stands out as amongst my favourite piece of Tau fluff.

I am currently reading the fire warrior novel and it is helping a lot. My question is do you think Ethereals have some form of training?

Do you mean training like education? I assume they have their own advancement system similar to how the fire caste does.