How to cite section of a paper or chapter a book

For section of a book you can add reference of type @inbook to bibtex, but for my purposes it is usually easier to cite using

\cite[section~1.1]{foo}

 this way you can for instance cite several parts / sections / chapters from the same book or paper.

How to force no indentation at the beginning of a new section

Use the \noindent command at the beginning of the section. This will force the first line to have no indentation at all.

How to refer to sections

Use \label to add label to a section and \ref to refer to it.

\section{Greetings}
\label{sec:greetings}
 
Hello!
 
\section{Referencing}
 
I greeted in section~\ref{sec:greetings}.

 see http://en.wikibooks.org/wiki/LaTeX/Labels_and_Cross-referencing for more detils