Service Tag

A Service Tag is a tag meant to identify soldiers quickly during battle. They're used in the Halo 3 and Halo: Reach Multiplayer, and in the Halo 3: ODST Firefight.

Service Tags consists of one letter and two numbers in Halo 3, or an arbitrary combination of 4 letters or numbers in Halo 3: ODST and Halo: Reach.

Service Tags show up above the player's head in the HUD, with a marker indicating their position; in team games, players can see their teammates' locations and Service Tags even through walls. When the player's crosshair is directly pointed at the player, the full user name is displayed instead. When players die, the service tag is replaced with a red cross, indicating that the player is dead and helping the slain player's teammates to locate enemies.

Advantages
It is good to set your service tag identical to your profile name, so allies can know which of their team-mates are with them. Also, if you cannot directly center a soldier, you are still able to catch their service tag.

Prohibited Service Tags
Some service tags are not allowed because they have vulgar or offensive references, used for guests only, or copyrighted. Here is a list of prohibited service tags in Halo 3 and Halo 3: ODST.

Halo 3

 * Every service tag ending in -00
 * A23 - reserved by UNSC
 * A55
 * L17 - reserved by UNSC
 * I17
 * E43
 * A01 - resembles 'AOL'
 * A20
 * C17
 * E51
 * E74 - resembles 'Red Ring Error Code E-74'
 * F43
 * F46
 * F48
 * F49
 * N34
 * N64 - a games console
 * N84
 * P51 - resembles "PS1"
 * P52 -resembles "PS2"
 * P53 -resembles "PS3"
 * T17
 * U50
 * V50
 * Z17

Halo 3: ODST

 * C0DY
 * B4K4
 * C0CK
 * Tags that have curseword references.

Trivia

 * When I17 (resembling 117) is entered as a service tag it will say "this service tag is currently reserved by the UNSC," likely due to the fact that it resembles John-117's tag.
 * Some of the above service tags (I17, for instance) actually can be used. It's pure luck, however, as you may be given that service tag at random when you first play Halo 3 on an Xbox 360 profile.