[2012 Updates] Eligibility for most VA benefits is based upon discharge from active military service under other than dishonorable conditions. Active service means full-time service, other than active duty for training, as a member of the Army, Navy, Air Force, Marine Corps, Coast Guard, or as a commissioned officer of the Public Health Service, Environmental Science Services Administration or National Oceanic and Atmospheric Administration, or its predecessor, the Coast and Geodetic Survey.
Generally, men and women veterans with similar service may be entitled to the same VA benefits. Dishonorable and bad conduct discharges issued by general court martial may bar VA benefits. Veterans in prison and parolees must contact a VA regional office to determine eligibility. VA benefits will not be provided to any veteran or dependent wanted for an outstanding felony warrant. See more details in the official VA guide.
[2010 Details] Note: Eligibility for most VA benefits is based upon discharge from active military service under other than dishonorable conditions
Veterans Compensation Benefits Rate Tables (Since no 2010 COLA increase, rates are the same as last year)
Source and for more information : Dept of Veterans Affairs