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Do Ordo Xenos Inquisitors, who help organize, lead and direct the Deathwatch hunt down and search for new initiates into the order? Kind of like sports talent scouts, do they go to battles and watch from afar to find Battle Brothers particularly suited to joining the order of the Deathwatch?

It probably depends on what Deathwatch you are referring to.

There's GW's version, which is an integrated part of the Inquisition's Ordo Malleus, and then there is the interpretation that FFW came up with for its series of 40k RPGs, which is an independent entity merely allied with the Inquisition. There's probably lots of novel author interpretations falling in-between the two, too.
I'm more familiar with GW's original version, so I'll try to add something from this direction; I'm sure other dakkanauts can fill in with other, equally valid accounts from the RPG or the novels.

It seems to me that the Chapters sworn to assist Deathwatch are conducting their own selection, basically entering the names of suitable Marines into a Chapter's roster of personnel suggested for deployment in the DW. An example would be Captain Artemis, whose background can still be accessed on this archived website.
Inquisitors likely have too much to do to "waste time" observing Space Marines - however, I'd deem it entirely possible that an Ordo Xenos Inquisitor who has secured the support of a Chapter in an anti-alien operation may, by pure chance, become convinced that a particular Space Marine would be suitable for this job, and so may request or requisition him from the Chapter Master, either by inducting him into his or her own team, or by suggesting to send this capable individual to the Deathwatch.

 bocatt wrote:
Do Ordo Xenos Inquisitors, who help organize, lead and direct the Deathwatch hunt down and search for new initiates into the order? Kind of like sports talent scouts, do they go to battles and watch from afar to find Battle Brothers particularly suited to joining the order of the Deathwatch?

Deathwatch only takes "veteran" Astartes.

That does not mean though that some of those members will not be from Scout units. It's not entirely unheard of(but poorly represented in the game proper) for a Scout squad to have a Veteran Sergeant who would potentially qualify for Terminator honors if they chose to accept them.

Veteran Sergeant Naaman of the Dark Angels immediately springs to mind.

I realize the title of my post was a bit confusing but I was referring what Lynata was referring to. Where an inquisitor acts as a talent scout. I appreciate both answers though. Who is this Dark Angels Scout you're referring to? I've never heard of him (I'm not much of a DA buff) did he go from Scout Company to the Deathwing? Do Deathwatch Marines all bear the Crux Terminatus? I thought most of them were basically Sternguard or Vanguard, seconded to the Ordo Xenos.

 bocatt wrote:
I realize the title of my post was a bit confusing but I was referring what Lynata was referring to. Where an inquisitor acts as a talent scout. I appreciate both answers though. Who is this Dark Angels Scout you're referring to? I've never heard of him (I'm not much of a DA buff) did he go from Scout Company to the Deathwing? Do Deathwatch Marines all bear the Crux Terminatus? I thought most of them were basically Sternguard or Vanguard, seconded to the Ordo Xenos.

Scout-Sergeant Naaman is an older character who is detailed in "The Purging of Kadillus"(a fairly good book) currently.

He did not go from "Scout Company to the Deathwing", but rather he had the effective rank of that of the Deathwing(and the trust given to a member of that group within the Dark Angels as well) and chose to go back to the Scout Company.

I doubt all the Deathwatch Marines would have the Crux Terminatus, but rather they are Astartes who get pulled into the Deathwatch based upon circumstances like having been part of an exceedingly successful campaign against a particular Xenos breed or things of that nature.

Telion?

Telion opted to remain as a scout sergeant, and carries a great deal of respect and admiration from the other reserve and regular companies. There was a quote in eye of vengeance bl where he and his scouts are walking across the base, noting the nods of respect from every passing marine, grateful in the knowledge that that telion and his angels would be watching over them.

Or something to that effect anyway.

However none of that answers the ops question.

I was under the impression that chapters were required to send battle bros to the deathwatch themselves, ie they wouldn't be chosen by an inquisitor (who are I believe largely untrusted by the astartes with some notable exceptions)..

That's not to say however that if an inquisitor requested a certain marine that he'd be turned down; that'd be too dangerous a thing for a CM to do. Ultimately I guess each chapter has their own method of selection, with the occasional or rare prod from the inquisition itself.