There is some incorrect info in this thread. I'm a USAF academy grad and here's what I remember about how admissions worked when I applied.
First, you need to meet the standards. This is not as easy as it sounds, since to be competitive you need both good grades and extra activities such as varsity sports, school council, scouts, etc. On the other hand, grades below a 4.0 do not automatically disqualify you, and unlike many other universities they are very happy to accept as freshmen applicants people who already have some college experience.
Second, you have to inquire. When you inquire, the service academy will send you an info packet that should fully explain the process, including the next couple of steps. If you are qualified to apply, you should also be assigned a Liason Officer, usually a retired officer living in the local area, to assist in the application process.
Third, you apply, just like any other school. Until you get a nomination however, your application sits and goes mostly nowhere.
Fourth, you get your congressional nomination. Every congressman, both senators and house reps, have 4 slots at each major service academy, and they can nominate 10 candidates for each slot that is open the next school year. As an example, when I applied my representative had 2 slots in the class of 1994 open, so he could make 20 nominations. Of those 20 nominations, about 10 of us were accepted and I think 6 of us actually went. The nomination process in my area involved putting together an application and going in for a formal interview with a board that advised my congressman. No matter how good your on-paper application is, if the congressman's people think you're a tool then you won't get a nomination.
You must also pass both a DODMRB (Dept of Defense Medical Review Board) physical and a fitness test. I do not remember when this comes, but there is also a screening process that comes before your full application and nomination process that weeds out those who are not qualified. Those who do drugs get eliminated at this point, those that smoke are told that they need to quit before entering, and those who are not student athletes are told that they're already years behind their potential classmates and they have until entry to get into shape, or they simply won't be able to handle the physical demands of basic training at an altitude of 5000+ ft.
Somewhere in here, you'll be told you're an official "candidate", which if I recall correctly means you've met the basic requirements and are awaiting word whether or not you've been accepted.
How could 10 of us get accepted from one district in one year you might ask? Some congressmen never have anyone in their district who is qualified to attend. This is very sad IMHO but it's also very true. Some of us from my area simply filled unused slots from other congressmen.
There are other nomination sources. If you're not academically competitive but have an otherwise strong application, as is often the case for athletes or prior-enlisted applicants, they may get accepted to the prep school, after which they're pretty much guaranteed entry to the Academy. The Vice President has some nominations. Medal of Honor winner's children are automatically offered a nomination (Presidential nominations?). There may be others, but I do not remember.
All this info was current as of a couple of years ago, and I do not remember hearing about any major changes to the application and nomination policy. As always, check directly with the source to get the full scoop. Anyone considering applying to a service academy should directly contact the admissions office to get the application packets, and I also very strongly recommend making a visit to each academy you're applying to in order to see what they're all about. All the academies have summer programs and official tours for prospective candidates, and again I strongly recommend going on one of those trips during the application process.
A last note - anyone who really wants to go to the academy should never take NO for an answer. You can keep applying until age 23 without a waiver. If you're turned down the first year, go to college anyhow (any college, it doesn't really matter) and do your best that first semester/year, and re-apply. Keep applying every year until you get too old or they accept you. I had to apply twice to get in because my congressman had no spots my first year, and the one person in my area who got one of those floating nominations got accepted but turned it down. So it's not over until you're too old.