Now that I’ve calmed down… I spoke to our lawyer this morning. She agreed that we were correct to file the daughter as our dependent, because the divorce decree states that my husband is to claim his daughter every year. No switching years, no stipulations. Plain and simple, he is primary custodian, he claims the daughter…
I spoke with a representative from the IRS after the lawyer, because I wanted to make sure we were covered from every angle. Publication 501 is the IRS low-down for 2006, and the info I stated above can be referenced on page 11. The IRS lady was super-helpful. I just googled the hotline number and she broke everything down for me, ■■■■-and-jane-style. 
Military divorcing/separated families, take note!!!
For a “normal” divorced couple, the person to claim the child as a dependent on tax is whomever had the child for the majority of the tax year. This is NOT necessarily the court-ordered primary custodian!! If you have custody and your child lives with your grandma instead, then grandma can legally claim the child. If you don’t have primary custody, but the other parent allows the child to live with you for most of that year (regardless of what the custody papers state!!) then the IRS will allow that parent that had the child physically in their home to claim the exemption. (See page 11, “Custodial Parent and Noncustodial Parent”). This is very important for any families who might be “trying out” custody with the other parent without actually amending the order! If you let your child live with the noncustodial parent for the majority of the year, you will more than likely not be able to claim that child on your taxes without permission from the other parent, despite what your divorce decree might state.
My husband’s daughter DID live with her mother for the entire tax year, because my husband was on orders out of the country and was afraid of the legal ramifications if he took his daughter with him.
BUT BECAUSE OF THE SPECIFIC REASON (MILITARY ORDERS)THAT RESULTED IN HIS DAUGHTER BEING OUT OF HIS PHYSICAL CARE… He is STILL considered the custodial parent.
*If your child does not live with you because of Military Service, the military service is considered a “Temporary Absence” and the child is STILL considered to have lived with you, even though they may have physically resided with the other parent during your absence. (see page 11, “Temporary Absences”)
SO, because my husband sent his daughter to live with her mother during his deployment, that “Temporary Absence” due to military service trumps the “custodial parent” requirement that his ex meets, so he is still in the right to have claimed his daughter.