Here's a recent e-exchange between me and a former coworker:

WILLARDO: Maybe the poor media chaps have confused
Marine with . . . mariner?

Anyhow, here's how I learned the proper prose for those
soldiers not in the active component (as opposed to the
reserve components): Since the National Guard was birthed
before the Army Reserve, we always should defer to that
order of existence when we speak (or write) of them in the
same breath; thus, we should state (e.g.,): "We've examined all the latest data from the Guard and Reserve forces, concluding that the Marines have the best back-up
resources." Also disfavored by the cunningly linguistic
purists is the use of the term Reservist (or reservist);
"Reserve (or reserve) soldier" seems to dignify their
status. Also, another tip: most soldiers disdain the term
National Guard "member" (since the Guard ain't no club!).
And, finally: it's passe to use "Guardsman" (unless you
somehow can use "Guardswoman"); so the correct term should be: "Guard soldier."

No charge for this (nostalgic) refresher course, mi amigo!
-- OO

Unka Larry, for my own amusement and bemusement, I have
been codifying various editorial points regarding things
military. You and I used to chew the fat about
Reservespeak and Guardspeak, but I have forgotten some of
the intricacies. Can you amplify my entry here? I do not
recall how we referred to Reserve and Guard soldiers of
various categories, nor what the rules for capitalization
were regarding them. UB

***************************

Often in news articles I see the word "marine" (meaning a
member of the U.S. Marine Corps) written in lower case.
It should always be capitalized. It is the only such term
that is capitalized within the U.S. Armed Forces. One
should not capitalize "soldier," "sailor," airman," nor
"coastguardsman," but one should always capitalize
"Marine." ("National Guardsman" would be capitalized, but
the term has gone out of service, so to speak, and has
been replaced by "Guard soldier" or "National Guard
soldier.")

As an Army writer-editor for 18 years, I followed this
convention set forth in the GPO Style Manual and also in
the AP Style Guide. It is backed up by the American
Heritage Dictionary, Second College Edition.

This point comes to mind because I have read at least one
article in the past few days incorrectly lower-casing
Marine in describing U.S. Rep. John Murtha, a former
Marine officer.

Another point worth noting for fiction is that most readers aren't going to know what the military jargon means.  I critted a piece by a former Marine where he used the rank abbreviation every single time he referred to any of the characters.  While I understood what the ranks meant, the non-military readers were very confused.  This is example of where a reader might really get confused over military jargon:

 "PFC Smith, double-time to the AO and report to the first shirt." The reader is stuck on what PFC and AO mean, trying to figure out what double-time is--and why is the soldier is reporting to a shirt?! (This all translates to the soldier is hurrying over to see the first sergeant. First shirt is military slang for first sergeant, who is like a personnel manager.)

With a previous project that was about the military, I tried that, but the beta readers still didn't really get it.  They could read that that a SPC means a Specialist, but they don't really get how it fits in with the structure of the military.

For my current project, which also has some military in it, co-writer and I discussed this subject quite extensively.  How much did we actually need to do?  How much would the reader understand?  Factored into this was a comment I got from the military when I was thinking of getting out.  They told us that when people heard army, they thought of Beetle Bailey!  Things like "I was a captain in charge of ..." wouldn't mean anything, and neither would mentioning all the awards the soldier had received (people were putting them on the resumes).

So we considered what exactly people were seeing in the media and would likely at least know about.  The first was that they would know that Generals were in charge.  They're always on the news, and big discussion is given in the press when one is appointed to a high level position.  We also figured that they would understand that officers are leaders and that it's a position of power.  This was safe territory, since most of the books with military in it (other than a military focused book) had officers in them.  And then there's MASH, which ran for 11 years, and had a colonel, captain, and a major.  So we used a general, a colonel, a major, and a captain, and explained in the context of the story that a captain was outranked by the other three (which was important for the story).  All the other ranks we left out because they wouldn't have helped the reader to know them.