Yes it does. You can see your military rating go up and down as you move ships in and out of orbit. This can be seen with a one turn delay in the graphs of military might at the bottom of the main screen or in the civilization manager, although you need to press end turn with the ships both in and out of orbit to see this actully be recorded in the graph. You can also see your current military might in the military stats section under the Stats & Graphs section of the civilization manager. In this case you don't have to press end turn, the number reported is directly your military might.

Early in the game you should use cargo hulls crammed with only the top line weapon that you have. Later on you can replace this with a huge hull ship, again crammed with only the top line weapon that you have.

It is tough for military to be a big component of your score on small games, however one major point about score regardless of which of the four components (population, economy, research, military) it comes from and that is high values of any of these components held for short periods of time (like at the end of the game) do really not add all that much to score. It's high values of the four components that are held high for long periods of time that really count towards score. It's not the height of the graph at the end of the game that counts it's the intergal of the area under the curve.

Mumble deserves Martin Luther - he translates GalcivII from C++ into English.