If anyone doesn't know for certain yet, heck if anyone still cares:

The DVDs prove it; further speculation is moot. In the Sheppard-activates-the-Chair-in-Antarctica scene in "The Rising Part 1" the letters on his name patch are legible - John Sheppard is USAF.

thepouncer listed very convincing reasons in this post why Sheppard ought to be Army, and astolat did some more research here and here - well, the high resolution of the DVDs has finally solved that riddle for certain. Not that I'm really surprised that TPTB evidently went to fewer lengths, research-wise, and just made something up.

Anyway, it's definitely interesting to finally have the visual proof: