My husband and I are both active duty and we used this the last time they offered it (nov 2003). It was a great deal, combined with the Armed Forces Vacation Club condo as other poster stated. We plan on going back with the kiddos for spring break this year.
They are also offering the following dining/room deal:
Military Package with Dining
Special deal for eligible members of the US Military*: A discounted Military Package with Dining is available for stays most nights 1/4/09-12/23/09, except not available at all 2/13-2/15, 4/4-4/18, 5/22-5/24, 7/3-7/4, 11/25-11/26/09.
The Military Package with Dining does not include tickets because there is a special ticket offer for military.
The package includes a room discount of up to 40% off, but the Dining Plans are priced at the regular rate.
The Military Package with Dining is subject to regular Walt Disney Travel Company package rules.
*Offer available to active duty military, activated reservists and retired military. Proof of Military eligibility is required.
Thanks to Small World Vacations for info!