By now, you've heard all the arguments, so you're either in favor of Don't Ask Don't Tell, or you aren't. It isn't really Don't Ask Don't Tell, anyway, because the military diligently investigates all rumors of homosexuality in order to extirpate the so-called mental illness from the ranks. So even if gays don't come out, they must live in constant fear of being discovered.
As for the morale issue, I saw an interview once of an Army veteran from the Deep South who had gone to Vietnam as a young soldier in possession of all the usual cultural prejudices that one would expect. He came back a changed man. "There's something about being in a unit, knowing that all your lives depend on everyone doing his job," he said. "You put your life in your buddy's hands, and he puts his life in yours. You don't care about what color he is."
And as far as whether gays can make good warriors, there's a story about Alexander the Great, who, as legend goes, was gay. His troops were horrified to learn about his lover, who accompanied him on his campaigns as he conquered most of the known world.
What upset them wasn't that Alexander's main squeeze was a man; it was that he was a Persian.
So the problem isn't really gays serving in the military. The problem is with people who have a problem with gays serving in the military.