I suggest to use biblatex. Below you'll find a compilable minimal example with hyperlinks and some basic formatting (autor-year-style, use of "et al." in citations).
\documentclass{article}
\usepackage[style=authoryear,maxcitenames=1,maxbibnames=99]{biblatex}
% Remove "In: " before journaltitle for @article
\renewbibmacro{in:}{%
\ifentrytype{article}{%
}{%
\printtext{\bibstring{in}\intitlepunct}%
}%
}
\usepackage{hyperref}
\usepackage{filecontents}
\begin{filecontents}{\jobname.bib}
@article{Arn11,
author = {Arnold, J. P. and Peter, S. J.},
year = {2011},
title = {The growth of space instrumentation},
journaltitle = {Journal of Adv. Tech.},
volume = {63},
pages = {5565--5578},
}
\end{filecontents}
\addbibresource{\jobname.bib}
\begin{document}
It has been shown \autocite{Arn11} that space technology is expected to~\dots
\printbibliography
\end{document}
(The filecontents environment is only used to include some external files directly into the example, so that it compiles. It is not necessary for the solution.)
hyperref. – Martin Scharrer♦ Feb 17 '11 at 13:34