Its really more like 25-50% broken. I can get a fully equipped squad of axe dwarves, get them trained up (by leaving them inactive so they do individual training), and get them to massacre ambush level goblins and kobolds. I even got my crossbow dwarves to start training last night using the assigned ammo and everything (it took a bit of fiddling: I can try and remember my process if anyone is interested). I haven't tried them in battle yet.
Its easiest just to stick with un-ranged weapons.
1/ First make sure you have all the required equipment: a full set of armor for each squad member you intend to have (helm, breast plate/mail shirt, greaves, 2x gauntlets, 2x boots, shield), and a weapon, and spares, and training weapons. I normally make 1.5x as many of everything as I need for when I take losses.
2/ make sure you have Arsenal dwarf assigned, with an office, and make sure he is finished creating the equipment manifests. If he has been assigned, has an office and is set to no job then you can be pretty sure he is finished doing inventory.
3/ Now you should choose the soldiers to use in military (make sure non of them have the "don't do more work than necessary" trait), easiest to do this in Dwarf Therapist, then give them all a nickname so you know they are to be your military.
4/ Save game! Before you ever enter the military screen, but once you think you are ready to. Just as a precaution, if you mess up you can start fresh.
5/ Go into military screen: create a uniform (work it out its not too hard if you are used to the DF interface), specify each item (one of each of helm, breast plate/mail shirt, greaves, gauntlets, boots, shield, and specify the material for each one (I like all mine in exactly the same armour so I always assign either iron or steel, but apparently it also works with unspecified materials, or general ones, e.g. metal/leather). Also add a standard weapon and a training weapon of the same types, e.g. a steel axe and a wooden training axe. [edit] Switch it from "over clothes" to "replace clothes".
6/ Still in military screen: create a new squad using the uniform you just created. Assign all the squad members that you previously gave your military nick name to.
7/ Still in military screen: go into the schedule screen, remove/cancel ALL orders.
8/ Leave military screen. You should be done now. Your new squad should pick up equipment as it is assigned to them by the Arsenal dwarf. If you get them to move to a location you should see them pick up the rest of the equipment they need then muster at a location (at least the ones that aren't sleeping/eating/slacking will anyway). Commands are given through the squad menu (press 's' from the main menu). Remember to cancel orders once they are complete, even after your squad kills its target the order is still active, you have to cancel it manually, or replace it with another order. Your dwarves will starve/dehydrate to death without leaving their post, so remember to cancel orders!!
Hope this helps..
Oh, I didn't mention: I don't even bother with a military till I have the industry to create at least an iron set of armor and weapons, and have at least 50 dwarves. For most of the first 3 years or so I use purely trap based defences, and build a big wall around my fort entrance with a single raising bridge, and a couple more raising bridges in the main entrance corridor. I'm not confident in the military code as it is to start creating one and then try and expand or disband it later. I just try and do all the set-up and creation at one time, when I am fully ready, then leave it the fuck alone (as someone else mentioned).