When building a skele is there a method to it? Start from the bottom and go up? Or the hip bone go up to the head?
It depends on the engine or environment you are building the skeleton for. It is very common for the hip bone, in the middle of the skeleton, to be the first bone or at the top of the chain. It is also common to have a bone named Root at the top of the chain and it may be at ground level in the center of the model. If you are just playing around and want to animate something to get the feel of Fragmotion it doesn't matter.
How do you stop the bone chain?
My guess is that I do not understand this question! The only answer that comes to mind is you stop creating bones.
To do the arms do you just click on the chest bone and then create left or right?
I normally bring a shoulder bone off the chest or upper back bone then an elbow, wrist, and hand. You may also want a mount bone at the hand to mount objects to, depending on what you are planing to use the model for. To start a sub chain off the chest bone you select the chest (select a bone in the Skeleton Pane of using the Bone Selection Tool in the Tool Pane) then use the Create/Bone tool in the Tool pane to create bones. Any new bone will become a child of the currently selected bone.
How far out into the arm do you go, just to the wrist?
Again it depends on what you a planing to do with it. I actually built a few models that speak sign language, they had to have finger bones.
If a models arms are not in T pose will it be a real program setting the skeleton?
I simply find it easier to build a model in T-Pose and the legs spread apart. it is really hard to work with the area between the legs and between the arms and body if a model is not in T-Pose. If you plan to use motion capture animations you'll need to match your pose to the animations.
IF you will look in the Announcements Section on this forum, mrbones has some free mocaps. This would be a really good place to get started with skeletons, look at them and see what he has done.
I also have a partially rigged, animated model here: http://www.fragmosoft.com/forum/index.php?topic=459.0
That you are welcome to use, study, laugh at...