Does it count?

I am a Commonwealth citizen who came into the UK on Working Holiday Maker Visa in January 2003 and then joined the Armed Forces in March 2004 which I was issued with a stamp in my passport stating i am exempted from immigrational control.
Could you please let me know if I can apply for a naturalization in 2008 since that will be my five year point, and does the period between when i was on working holiday Visa counts to my five years stay in the UK?
Please do help me x x x x

Working Holiday doesn't count towards the 5 years because it is a "non-settlement visa".

The usual process for naturalization is that after 5 years you can apply for Indefinite Leave to Remain and after 1 year on ILR you can apply for British citizenship. The "ILR clock" starts when you transfer from Working Holiday to a settlement visa (HSMP, Work Permit, etc). I am not sure what the rules are if you have been in the Armed Services, maybe the timelines are less or the ILR isn't required. Someone else would be more expert than me!

The rules are different for members of the armed forces. You should ask your liaison officer for detail, but I think you should qualify after 5 years.

Victoria

SET(O) says 4 years for ex HM forces but doesn't say anything about people still serving.

See also 276P and Chapter 15 - Armed forces. People still serving are exempt from Immigration controls, and Immigration controls includes ILR!