Since the dawn of time, man has relished in the use of symbolism. From as far back as prehistoric cave paintings and totem poles, history is enriched by a full array of symbolism. This symbolism has never, throughout the history of man, lost it's power. The power of symbolism comes from instantaneous recognition of the image or device being rendered. Modern man understands this power, which urges companies to create logos, militaries to create insignia, and sports teams to create uniforms with logos. All of us now enjoy the gentle and colorful art and science that took it's roots in feudal Europe. We call these roots, heraldry.
It is interesting to note that the term that we use today as a family crest was not a part of heraldic tradition. The earliest use of a family coat of arms originated before heraldry. The family coat of arms should be more accurately stated as a family mark. Households would put a graphic image on their property to allow everyone to know that the piece of property belonged to a certain family. The images were used because very few people could read and wright. A good modern example of this comes from the American west and the ranchers. The ranchers would put a brand on their cattle to signify that this cow was owned by a specific family (for example, the family owned bar-T ranch). This did not indicate nobility, title, or anything other than a mark of ownership.
Heraldry has been defined as the art of blazoning, assigning, and marshalling a coat of arms. The origins of this art is disputed. The most widely recognized origin was the need for a combatant to be recognized during a battle. Some historians have theorized that the origins of heraldry come from the above mentioned family mark. The difference was that the heraldic "marks" were used by the noblemen, which were protected by law. Whatever the original origin may be, heraldry and the use of devices on a shield became military status symbols. Heraldry was also indisputably used as a way to identify soldiers during and after a battle (both to recognize a combatant who is still in the battle, and a means to identify the fallen after the battle).
As armour became heavier and more cumbersome, the ability of a armored warrior to tilt his helmet back as William I (William the Conqueror) did at Hastings, became an impossible task. Therefore, men in armour distinguished themselves through the devices on their shields and surcoats (which were worn over their armour). If the person carrying arms were a Nobleman (or high ranking Knight), their followers would also use the devices of the noble, thus signifying which military unit they belonged to. Feudal armies employed banners to signify to their soldiers where the rallying point, or headquarters, of their unit was located at. These heraldic devices used by mounted soldiers, became hereditary as the first son retained the devices of his father.
As the Knightly class grew and began to blend with the nobility, heraldry became regulated. A coat of arms became the right of a Sovereign to grant to an individual for service to the crown. Adornments to the coat of arms were then granted to the bearer of the arms to signify achievements. For example, the Sovereign might add a specific device to the blazon of arms as recognition for military victories during a campaign. Therefore, heraldry became the way for a Knight or Nobleman to visually represent who he was, his importance, status, and achievements.
The ancient use of heraldry has never become obsolete. In today's military, every soldier wears a distinctive unit patch to signify what unit he or she belongs to. The United States Army has an Institute of Heraldry to create distinctive crests and devices to signify certain units, grades of power (rank), and honors (infantry badge and the medal of honor). All of these devices and crests are a visual representation of the wearers importance, status, and achievements. The big difference is that in today's military, the insignia are not granted to the individual (they are not the property of the individual) and are not combined on a single shield. To find all the information you will have to look at his shoulder to find which unit he belongs to, his arm or collar to see his status (or rank), and his chest to see his achievements (medals).