Taking a look at these rules, I definitely am liking how they are turning out to be more cinematic. I want to see these battles and how they unfold, not just on how they look on the tabletop, but how they just might look and feel in the 40k universe. Challenges look like a ton of fun to me, so I am all for them.
From the Beasts of War, here is how they will work.
It looks like independent characters and other characters (not sergeants or other unit upgrades) will be able to issue a challenge in close combat to another similar character. From what was said, the charging unit has the first option whether or not issue a challenge, and if they pass, the unit being charged could issue a challenge.
Previous rumors had the entire results of this challenge combat, if accepted, determining who wins or loses the assault.
On the receiving end of a challenge, if you accept you go into base to base and resolve the challenge. If you choose not to accept the challenge, you fall to the back of the close combat out of base to base and let your unit do the fighting for you, resolve combat normally.