You are eligible to apply for a grant if you are or will be attending an accredited college that is in the Pell program (most colleges are). You cannot be in default on a Stafford student loan. There is no restriction on applying while in the military or after service.
First and foremost, fill out a FAFSA form online. (Link is provided below.) The FAFSA form can be filled out as early as July 1 for the upcoming academic year. Apply as early as possible to ensure you get the maximum award you are eligible for.
Grants, when awarded, range in amounts. The higher your annual income, the lower the award will be. It is doubtful that you would win any award if your household income exceeded $50,000. The maximum award for the 2009-2010 academic year was $5,350.
Once you receive notice of an award, the information is sent to your school to confirm registration. The award is paid against the balance of your tuition and fees, and any remaining amount given to you, usually in the form of a check. If you have paid all fees and tuition, you should receive the full amount of the award and can use it to buy books, supplies and for personal expenses.