The third generations were kids orphaned or seperated from their parents during the Covenant war. These kids were not specificaly chosen and are all volunteers. They however were made to be more expendable, unlike the Spartan II's, thus their armour is not as strong, nor are their augmentations as severe. Many of the Spartan III's undertake suicide missions, with only a handful out of hundreds returning after each campaign. This is supposedly where the rookie (or is it the whole squad?) featured in Reach comes from.
DigitalExile
Halo Reach took place before the first halo game, storywise. The spartans in Reach are all Spartan IIs, and its from the battle in space (not shown in the game) that Captain Keyes randomly jumps into slipspace and stumbles upon halo.
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