The registration of preoperative CT to intra-operative reality systems is a crucial step in Computer Assisted Orthopedic Surgery (CAOS). The intra-operative sensors include 3D digitizers, fiducials, X-rays and Ultrasound (US). Although US has many advantages over others, tracked US for Orthopedic Surgery has been researched by only a few authors. An important factor limiting the accuracy of tracked US to CT registration (1-3mm) has been the difficulty in determining the exact location of the bone surfaces in the US images (the response could range from 2-4mm). Thus it is crucial to localize the bone surface accurately from these images. Moreover conventional US imaging systems are known to have certain inherent inaccuracies, mainly due to the fact that the imaging model is assumed planar. This creates the need to develop a bone segmentation framework that can couple information from various post-processed spatially separated US images (of the bone) to enhance the localization of the bone surface. In this paper we discuss the various reasons that cause inherent uncertainties in the bone surface localization (in B-mode US images) and suggest methods to account for these. We also develop a method for automatic bone surface detection. To do so, we account objectively for the high-level understanding of the various bone surface features visible in typical US images. A combination of these features would finally decide the surface position. We use a Bayesian probabilistic framework, which strikes a fair balance between high level understanding from features in an image and the low level number crunching of standard image processing techniques. It also provides us with a mathematical approach that facilitates combining multiple images to augment the bone surface estimate.