sorry for the rookie questions but how does  the Sword Masters of Hoeth ability work? 

Battlefield: cancel all damage assigned to this unit.

Does this mean the unit cannot get killed? 

When is the damaged cancelled?

They cancel only COMBAT damage and only on the Battlefield. They can be dealt non-combat damage such as indirect damage, can be destroyed, sacrificed, or returned to hand for example. They can also be corrupted so they don't defend.

Does counterstrike inflict "combat damage"? from the definition the rulebook, it seems that it is done outside of "normal combat damage".

From the FAQ:

Counterstrike
Counterstrike is a keyword that allows a
defending unit to immediately damage
an attacker whenever it is declared as
a defender. Counterstrike damage is
combat damage that cannot be split
among attackers, is uncancellable, and
is applied as soon as it is assigned,
before any other actions can be taken.

Thanks for this, and sorry for the FAQ confusion…(am new around and while i read the FAQ, i didn't get it the first time)

Mallumo said:

With respect to Swordmasters, its important to note that counterstrike damage is also uncancellable.  So while they cancel combat damage, and Counterstrike is combat damage, they still can't cancel it.