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What I wonder is then, if Naval pilots use Naval ranks, what's the highest rank they would achieve before being given a "desk job"? Because once you're into Cmdr status you tend to be more managing ship operations rather than flying around.
Desk jobs aren't always for the reasons you think...
Usually, there's an optimal age for flying when your nervous system is tuned to the highest response level, and your head is clear of all the other small details of life (kids, wife, mortgage payments, running 100,000 underlings). To fly, you must continually pass tests and "check rides" and instructor sims... no matter how old/powerful you are.
Like Manti said, you usually have younger pilots that give the check rides and test to the older ones. (My sis does the same thing). To stay on flight status (and therefore flight pay and danger pay... as military people make half of what they can get in the real world), you have to pass your rides. There's no lieniency, because a Crash Review Board is one of the worst experiences you could live through (the Spanish Inquisition seems mild by comparison). So, yes, Admirals and Colonels and Generals try to maintain their status as long as possible.
Also, as the only people that fight in the Air Force are Officers (and the occasional special forces guys (who are frikken awesome, btw)), 90% of the highest positions in the Air Force are held by former pilots. It's changing a bit, but it's not unheard of for a pilot to run a giant logistics organization, or payroll, or communications/computer wings.. even when they have no idea whatsoever what a LAN is. If you aren't a pilot in the AF, you're a second-rate officer... pilots get to cut in lines at the bank, get free drinks bought all the time, and usually skip all of the paperwork that everyone else has to go through constantly. They get the extra-crisp salutes.. and deserve them.
You also get Combat pay and pay no taxes for a month if you fly over (even for 15 minutes) one of the areas that marked "dangerous"... so on the 30th of the month, you see tons of high-ranking admirals and generals doing their check rides over in Germany and stopping over in Afghanistan to check on their troops... coming back on the 1st, and getting 2 months of no takes and a hefty bonus.
One of the biggest changes in this balance of power is the increased use of UAVs... as they're much cheaper, have MUCH less attitude, and don't require a letter home to a grieving mother. So, the young 17-year old kids good at computer games are starting to fly stuff, and getting the "cool" missions. The senior brass, of course, is resisting this... but the savings are too great to ignore. So, things are slowly changing, hopefully for the better.
On retrospect, I don't think the Air Force or the Navy will ever "win" the space competition. Like everything in America, the competition makes you stronger, better, and always pushes you not to become complacent. I bet that there will be both a Space Navy, a Space Force, and Space Marines... that will have primarily seperate missions (Space Force for the exploration/control of territories and able to focus huge power on targetted areas, Space Navy for long slow deployments and shuttling resources between the planets, Space Marines for close combat between ships and precision strikes in extremely hostile environments... and probably even the Merchant Marines for trading and ferrying goods through protected travel channels).