Most United States ground-to-ground and air-to-ground military target acquisition is performed with thermal sights on today's battlefield. It is extremely important, therefore, to develop systems that provide the best compatibility to the users, to predict their performance, and to correctly train them in the use of these systems to prevent fratricide and increase survivability. It is not possible to perform all the needed research by means of expensive field tests. Therefore, the use of perception studies has become popular for developing training, testing system designs, and assessing effectiveness of sensors and systems. We discuss some challenges involved in perception studies conducted to gain insight into surveillance and target acquisition by military users of thermal imagery. The goal is to emulate as accurately as possible what a military observer will actually see and how he will use the sensor to detect and identify targets. The issues discussed include prior training, panning effects on eye movements, and contrast and brightness controls. The latest advances in these areas and some remaining challenges are discussed.