I've taken over a wargames club almost 12 months ago and have been trying desperately trying to be "the all knowing one" as someone who is running a club should be, (I already know the rules for killing blow are on page 112... :o )

However I was watching a game the boys were playing the other day and they were saying you can't accept a challenge or make one unless you are in base to base contact with the model that is going to accept/make the challenge. I thought this was a bit wrong because I was always led to believe that the characters would seek each other out in the cut and thrust of battle and thus being a challenge.

From what the rule book says, the "unit" has to be in base to base contact and that if you have someone that can make a challenge then you can use them to do so, as long as they are in the front line of the combat. Just after a clarification. As I imagine tactically, if you challenge an opponent, there's the chance of A: killing him, and B: taking him out of the main combat so he doesn't make a mess of your stock troops.

You are right. ^_^
Both characters have to be in a fighting position in their units. That means, both characters have to be in btb with an enemy model, but not eachother.

Ie. a unit X is engaged in the front, and the rear. There is a character in the unit X. A unit Z that is in the rear has a champion. That champion can fight in a challenge with the character in unit X.

Another situation: unit X is engaged in the rear by Z. The character in X can't be in a challenge with the unit's Z champion, since there is no enemy in btb with the front rank of X.

Thanks heaps for that, really helpful :D