Oh, what the hell, I'll copy and paste all of it:
"Martial law is not to be confused with military government, which refers to the administration of occupied territory, nor with military law or military justice, terms that refer to the governance of members of the armed forces and certain closely related civilians. Martial law is the maintenance of order and the protection of persons and property by and through military authorities and agencies under circumstances wherein the civilian courts and other agencies normally serving that purpose are unable to function for the time being. It may be imposed upon foreign territory by an invading army, in which case it in effect amounts merely to the will of the commander, tempered only by basic humanitarian rules of international law. A more difficult and interesting subject, and the subject of this article, is martial law within the home country.

Martial law of this nature is a concept in Anglo-American law, corresponding in many respects to the "state of siege" recognized under French and other Continental law. Its principles have been more fully developed under American than under English law, reflecting the domestic tranquillity enjoyed by England since the seventeenth century. In the United States its principles derive mainly from the experience of the American Civil War, together with "Dorr's Rebellion" in Rhode Island in 1842, the labor unrest of the late nineteenth and early twentieth centuries, and the post-Pearl Harbor period on the West Coast. There has been little or no experience with it in recent decades, while at the same time the U.S. Supreme Court has reinterpreted many constitutional guarantees during this period. A caveat to this article is therefore appropriate: quite possibly some of the principles described herein would not be reaffirmed by the Supreme Court today.

Normally, a state of martial law in an area is proclaimed by the executive authority: the governor of a state, or the president on the federal level. It is a prerequisite to martial law that the civil arm of the government be powerless and the courts unable to function, normally because of insurrection or invasion. It extends only to the area where the civil government is actually unable to function. Martial law is not to be confused with the mere calling out of the militia or other military forces to help preserve order when the ordinary police forces are overwhelmed by riot or other tumult, but the courts and other civilian agencies are still able to function.

Unlike the Continental "state of siege," in which the powers of the military authorities are defined in advance with some precision, martial law in American law is a flexible concept, measured by the degree of necessity. In general, the military authorities can do all acts reasonably necessary to restore and maintain public order. They can arrest or detain civilians without warrant on reasonable grounds for believing that they are engaged, or if not detained may engage, in insurrection or disorder; they can limit the right of assembly, impose curfews, forbid the sale of alcohol, and search for and seize weapons without warrant. Within uncertain limits they can suppress newspapers that encourage the disorder.

Although the military authorities administering martial law may in some circumstances try civilians in military tribunals, the extent of this power is not wholly clear. The better practice is to hold arrested persons until civil authority is reestablished and turn them over to the civil arm for trial in the ordinary manner—a procedure established by President George Washington in the suppression of the Whiskey Rebellion in 1794. In any event, the sentences imposed by military tribunals are no longer effective after the termination of martial law.

By the same token, consistent with the supremacy of the civil power and the flexible nature of martial law, once martial law has terminated, commanders can be required to justify acts prima facie illegal that were taken while it was in effect—the most notable example in our history being the fining of General Andrew Jackson for contempt of court in connection with his unduly prolonged maintenance of martial law in New Orleans after defeating the British in 1815."
From:
http://college.hmco.com/history/readerscomp/mil/html/ml_032900_martiallaw.htm