yes, it sounds like it is functioning correctly. post some pics of the newborn! 
That's the disconnector catching the hammer. When you release the trigger that click is the disconnector releasing the hammer and the trigger catching it so it's ready for the next shot.And also, when the trigger is pulled back and the hammer is up and i pull the hammer back it locks in, when i let go of the trigger the hammer goes one notch up and locks also... this is how its supposed to function correct?