We prove for a class of nonlinear Schr\"odinger systems (NLS) having two
nonlinear bound states that the (generic) large time behavior is characterized
by decay of the excited state, asymptotic approach to the nonlinear ground
state and dispersive radiation. Our analysis elucidates the mechanism through
which initial conditions which are very near the excited state branch evolve
into a (nonlinear) ground state, a phenomenon known as {\it ground state
selection}.
Key steps in the analysis are the introduction of a particular linearization
and the derivation of a normal form which reflects the dynamics on all time
scales and yields, in particular, nonlinear Master equations.
Then, a novel multiple time scale dynamic stability theory is developed.
Consequently, we give a detailed description of the asymptotic behavior of the
two bound state NLS for all small initial data. The methods are general and can
be extended to treat NLS with more than two bound states and more general
nonlinearities including those of Hartree-Fock type.