I have an AR-15 that has a NATO spec chamber. I have access to a crap load of once fired brass .223 (not 5.56) winchester, remington, and federal. The brass was all fired from the Same full auto M-4. If I full length size this brass it should be good to go in my rifle right? I have hurd that you should not use brass fired in a SMG before but I dont know if thats true. I was wandering if its true if it is also true for a Machine gun.

As long as the rim is okay and the brass has no neck splits you should be okay.
I'm not sure how M4/M16s are on brass, but M249s can leave quite a ding in the rim from the powerful hit against the ejector.

I bought a bunch of brass that was fired in a M249, and about 1% of it was not useable.

There is no difference in the brass between 5.56 and .223. They are both identical. I have seen a .223 with a 5.56 reamer run in it, and the only thing that came out was a little of the phosphate coating right at the neck, and there's no evidence that isn't the difference that another .223 reamer would also take out, or another 5.56 reamer wouldn't touch.

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The NATO chambers have, I believe, an 0.030" longer freebore so a wide variety of bullet ogive shapes all seated to the same COL can be fired in them without throat interference. The ammo, as Matt said, is all made to the same external dimensions. The miliitary brass does not get the annealing stain polished off, which gives it better corrosion resistance, and is harder brass than some commercial brands to minimize stretching under full auto extraction and to keep the extractor from ripping the rim off.

The main worry you will have with commercial brass is that softness issue and whether it allowed the cases to stretch too far? The rims usually have pretty significant extractor marks if they did. Some full auto gear pulls really hard on the brass. The worry is the possibility extra stretching has left the pressure ring very thin, which could lead to head separation on subsequent extraction. You can feel that thinned area by bending a paper clip straight, then bending the tip into a short hook and probing inside the case with it. You'll feel the dip where the brass was stretched thin. Compare it to the feel of brass that was fired new in your gun. It may not actually be much different if it was fired in the M4.

The quicker check to make is to measure the headspace of a case that was fired new in your gun and compare it to those you've collected. If it is the same within a few thousandths, there shouldn't be an issue. Either the Hornady Overall gauge or the RCBS Precision Mic can make the comparison. Even just measuring the case length with a caliper may give you a clue. The new rounds should all have started out about the same.

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You should be fine. Clean and resize, and then trim all to a standard length.
The caution you have heard about was not related to SMGs (which fired pistol cartridges such as 9mm and .45 ACP). This was in relation to 7.62 mm NATO or .30-06 machine guns, where the headspace was often set by the operator, and could be a bit long. This would result in stretched brass. That problem doesn't exist for the M4 carbine, and most modern machine guns as they either lock up (as in the M16 variants), or the headspace is factory set.

Yep, anything with a 'quick switch' barrel should be avoided, like the MG42 and some Brownings (I don't know the specific models that had a quick switch barrel).

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Never had a problem with 223 military cases and a small base die. The 308/7.62x51 fired in a machingun was a little different. Wouldnt chamber using a standard die. Couldnt size it with a small base die. Had to size it in the standard die first and then the small base die to get it to chamber. Worked OK after the 2 step process using the standard die.

The local police used our club range for some practice and left behind numerous rounds of Remington .223 brass shot in their full autos. They even boxed it up. I have been reloading that brass without any problems. Take care...
Oberndorf

Try resizing it. If the required force is not excessive, then the brass is probably not overstretched.

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