army attack strength = unit strength + (sum of unit strength's/Z)
where Z = 6 normally, but becomes 4 once the Mil Academy is built.
Another weird thing about armies is the way that Civ determines the attacking unit. IIRC, if you put a tank in a 3 unit cav army (after Pentagon is built), and the tank will always be the attacking unit until the army is down below 4hp's. Makes those seemingly obsolete Army's quite useful for a long time. Arathorn wrote something about this @ CFC, I'll see if I can find it.
meanwhile, here's Theoden's article ->
http://forums.civfanatics.com/showthread.php?t=99688