The two main components of bone are a fibrous protein called collagen and a crystallised form of calcium phosphate known as hydroxyapatite. These two substances exist in roughly equal portions. The collagen arranges itself into layers of parallel fibres, with the fibres in adjacent layers lying parallel to each other, to form a kind of mesh that's a bit like plywood in structure. Around this mesh lies the hydroxyapatite crystals.
This structure is continually changing, by minute amounts due to two types
of cell: the oteoblast and the osteoclast. Osteoblasts create bone, while osteoclasts
eat it up. These two processes are usually as a result of changes in stress
levels on different parts of the bone.
Osteoblasts lie on the surface of the bone depositing fresh layers of a substance called osteoid. This is basically collagen plus a few extra bits. Some osteoblasts become embedded into the osteoid as they secrete it around themselves. The secreted osteoid rapidly turns into hard bone, as hydroxapatite crystals come along and stick to the surface of the osteoid fibres. The embedded osteoblasts are now stuck, unable to divide any more. They are however reasonably happy as they can secrete a small amount of osteoid and they are not left completely alone and buried. Small channels between the embedded osteoblasts form. The network between them is thought to help control the cells activities.