Apparently it was developed for/by the US Mil as a recruitment 'weapon' - is this true or another urban legend?
True.
Well, not completly. While the CDs are going to be given out at the recruitment offices, the download will always be available from many places, without any type of recruitment message. Overall, the objective of the games (yes, games as in plural, there is an RTS in development as well) is to give a better insight into the army. Many manhours are going into it to ensure it is very realistic, from the drill instructor at the firing range, to the sound of the weapons, and their inaccuracy when using the targeting marks. An amusing possibility is the jail. Team killing can result in a jail visit, and servers can be linked togther to effectivly enforce someones jail time for team killing intentionally.