Hero Spells

How do i make existing spells like bloodlust into a hero spell where it can be leveled.

Secondly with spellbooks, i dont really understand it and i've only seen Vexorian's demo, do the spells have to be in a separate category instead of the main menu or is that the purpose of a spell book?

There's a lil' button that says "Is a Hero Skill" or something like that in the ability editor.
Make that true and voillah.

Spellbooks work by putting the spells you specify inside the spellbook when you click it.
When making the spells to put inside, just make them as you would normally make a unit ability.
Now just select them in the data field for spellbook's ability list.

One of those simple things that make you feel so stupid, theres so much stuff and they tend to all look alike when your lost.

About the spellbook, that cleared up alot of uncertainties that the other explanations and tutorials created.