This is the first I've heard of Lt. Watada's case, so my opinion isn't totally informed, but I do have a few thoughts.
First, Lt. Watada should be court-martialed, and he should face punishment. Whatever you think about the war in Iraq, our military is based on a chain of command. It's a very powerful and very dangerous machine, and the only way to control it is to respect its hierarchy.
Second, Lt. Watada is courageous. He is taking a principled stand, and he seems to be following in the footsteps of MLK Jr and Gahndi by engaging in civil disobedience. He is using his court martial to very effectively call to question one of the most important issues of our day: whether the American public was manipulated and bamboozled into fighting an unnecessary war. Also, he is doing it in a practical way - he's not laying down his weapons on Iraqi soil and abandoning his compatriots. He's still on American soil, and unlike many others (i.e., those of the "me myself and I" generation bemoaned by one of the other commentors), he's not hiding - he is facing the consequences of his decision. He should face punishment for his disobedience, as Martin Luther King did when he wrote his Letter from a Birmingham Jail, but if his point is valid (which I believe it is) it is perfectly legitimate to support him, even if you generally support the chain of command within the military.
Third, I'd just like to point out that this is a serious debate. Calling other commentors names, questioning their intelligence, generally maintaining an air of disdain...it's really uncalled for. We have young men and women dying overseas daily so that we can enjoy the freedom to discuss these issues. We owe it to them to be civil and to give our freedom to have these discussions the respect it deserves.