So, I have gotten a lot of awesome feedback on how the battle damage looks... As it turns out it wasn't all that difficult either. All I had to do was follow a tutorial written by the Brush Brothers (image from BB blog which I followed). I was going to write up my own modified process, however it would never be as comprehensive as the original.
Awesome step by step tutorial on how I did my battle damage, using the brush brothers technique:
Now, if you interested in how to use this technique, and have the materials I listed last post to get started, start with the above link. All in all, its 8 stages (posts) from the BB blog. Simply click on newer post at the bottom of each post to proceed further to the next stage. One note however, don't be afraid that your getting too much masking fluid on the model. I don't mean too much coverage (unless you want to have the entire model looks like its damaged), but having it on too thick where you do want the damage to be located.
Now, as for the airbursh, I believe this make from Iwata is the best all around airbrush for modeling that reasonable. I currently use this model, and its been great to work with.
Ill post more on technique later when I learn more. As for now, just remember, spraying less is better... Its easy to cake on that paint an airbrush if your not careful.