Cliff notes on Depleted Uranium
Natural uranium is a blend of several isotopes. After you take out the one percent that’s U-235 - the extra-radioactive part, very good if you like chain reactions - and traces of other isotopes, the leftover 99% is barely radioactive and almost twice as dense as lead. (Remember, when people say that it stays radioactive for 4.5 billion years - well, first, they don’t understand half-lives; it stays radioactive for much longer than that - but mainly, that means that if you stare at an atom for, say, a billion years, it only has a 25% chance of radio-acting.) It gets used commercially where they need really dense stuff, and it’s safe it that context - few people climb into elevator shafts to lick the counterweights. On the battlefield, though, it’s used in bullets and armor. In this context, it tends to get vaporized. Those alpha particles that can’t penetrate a few sheets of paper get a chance to work you from the inside. But mostly the problem is that it’s a heavy metal, like lead and cadmium, and heavy metals are poisonous.
How poisonous? The Army insists so strenuously that it's safe that you're left with the impression that we ought to feed it to babies for their health. "[kidney-damaging doses] are far above levels soldiers would have encountered in the Gulf or the Balkans." -- DU Library - Department of Defense. Well good for our boys, I guess, but not so good for the people whose backyards we fought in while we liberated them. The DoD also quotes a WHO study: "No increase of leukemia or other cancers has been established following exposure to uranium or DU." But that study also says things like "Long-term studies of workers exposed to uranium have reported some impairment of kidney function depending on the level of exposure. However, there is also some evidence that this impairment may be transient and that kidney function returns to normal once the source of excessive uranium exposure has been removed." And it has a whole chapter on "Biokinetics of uranium species from the standpoint of nephrotoxicty" but I have to confess I didn't read it. Bottom line, as far as I can tell with a cursory literature inspection, is that US military use of DU may make a few (hundred) people sick but probably won't kill anybody, and if it did it would be hard to prove.
Meanwhile, here's an explanation of why it's used:
The unit (part of the 24th Infantry Division) had gone on, leaving this tank to wait for a recovery vehicle. Three T-72s appeared and attacked. The first fired from under 1,000 meters, scoring a hit with a shaped-charge (high explosive) round on the M1A1s frontal armor. The hit did no damage. The M1A1 fired a 120mm armor-piercing round that penetrated the T-72 turret, causing an explosion that blew the turret into the air. The second T-72 fired another shaped-charge round, hit the frontal armor, and did no damage. This T-72 turned to run, and took a 120mm round in the engine compartment and blew the engine into the air. The last T-72 fired a solid shot (sabot) round from 400 meters. This left a groove in the M1A1s frontal armor and bounced off. The T-72 then backed up behind a sand berm and was completely concealed from view. The M1A1 depressed its gun and put a sabot round through the berm, into the T-72, causing an explosion. -- excerpted from Dunnigan, James F. and Austin Bay, From Shield to Storm: High-Tech Weapons, Military Strategy, and Coalition Warfare in the Persian Gulf, William Morrow & Company, 1992, p. 294-295.