Here is something new that was just passed into law!
"Retired members were required to salute the National Ensign during the National Anthem by placing their hand over their heart. Now, thanks to changes incorporated in the 2009 National Defense Authorization Act, veterans and active-duty military members not in uniform may now render the military hand salute during the playing of the National Anthem and during the raising, lowering or passing of the National Ensign. For more information see the 2009 National Defense Authorization Act." http://www.edwards.af.mil/news/story.asp?id=123141734
So while in civilian clothes, both active duty military and veterans have the option to salute the colors. Of course, placing ones right hand over your heart is also an option.
There seem to be alot of people that don't know about the new rule. I was recently at a vets gathering that included WWII through the present. I was asked by more than a few of them why I saluted during the ceremony.
I understand that you can salute inside or outside covered or uncovered. I have been doin it for bout a year at lodge meetings when we do the pledge of allegience.
I think depending on a vet's source of service, some may or may not. Personally, being from a naval service, I would likely not choose to do so indoors or uncovered. Army vets may tend the other way.