Is this a technical question, or a "political" one?

Most microcontrollers originate in the USA, and the USA has certain restriction on exporting "technology" to certain countries - especially for military use!
If you have questions about this, you certainly need to seek proper professional advice!

Technically, at the component level, "military grade" just refers to extra ruggedness - extended operating voltage range, extended operating temperature range, more rugged packaging, radiation hardness, etc, etc.
The manufacturer will probably apply more stringent quality controls to its "military" parts (in fact, the "consumer" parts are often just the ones that fail to make the grade as "military").

As Russel said, it really all depends on the specific requirements of the particular "military" project - if it meets the specs, you can use it; if it doesn't, you can't!

You will probably find that military projects are subject to much tighter controls over the entire development, manufacturing & support process; eg, it may be compulsory to use a certain programming language and/or methodology...


Yes - this has been discussed here plenty already.
eg, see the Whitepaper from Xilinx cited here:
http://www.8052.com/forum/read.phtml?id=101005


A DSP (Digital Signal Processor) is just a high-performance microprocessor optimised for, surprisingly, Digital Signal Processing!
So, almost certainly, anything a microcontroller could do could be done by a DSP - but then you'd just be wasting all the optimisations of the DSP!
Also, a microcontroller is not just a processor but also a set of peripherals - you may well find that these are missing from DSPs...