OK I have played the game only 4 times. I played as the Invaders each time. On "Knee Deep in the Dead" I fragged the marine in the final room at the door (not the blue key door) and he respawned next to the exit and left. Is this legal? Please someone clarify this for me cause we spent an hour debating it. Thanks.

Forward spawning is perfectly legal. In fact, it's probably essence of Marine "survival". Planning your moves so that you can spawn forward rather than backwards if you die. Last couple of games, I've managed to use Earthquake to move Marines and then kill them, thus spoiling their planned forward-spawning and forced a back-spawn (minimum of 8 spaces back, that's 1 turn of Sprinting, more time for me to play cards). Sometimes you can just play it callous, attack a mass of enemies and get killed, spawning forward up to 16 spaces. That's several turns by Invaders' movement standards.

Further reading of your question though, do you mean that Marine X died say next to the door (adjacent, 1 space away) and then spawned back in the same spot? That's not allowed by the rules. If you die, you have to spawn minimum of 8 spaces away, if possible. If you die next to the Red door in the final room, you'll have to back-spawn somewhere in the room. The other way it would work, say you step in from the BFG corridor and die next to that door. Next turn, you can spawn next to the Red door on the other side of the room (assuming Invaders didn't block the spaces adjacent to the door).

Can anyone offer any information on what a marine should respawn with? I know they keep their guns and ammo, but if they have no ammo, do they re-spawn with no ammo or are they 'refreshed' back to the starting level?

Respawning marine looses armor and berserker tokens, he gets back his wounds tokens and thats it. If he died whitout any ammo he spawns back whitout ammo as well.

Sorry for my language.