The mental fatigue of battling so many creatures with little pause or break, wears the Marine's mental stability thin. It doesn't take much to break the spirit of a soldier when his enemies are faceless killing machines. All it takes is one unlucky blow to inflict a marine with Madness. Madness in Night of the Dead represents a soldier of deteriorated mental state's tendency to use excessive amounts of ammunition, often in an incredibly wasteful manner. The easiest way to snap him back to his senses is a painful shock.
Madness is a very peculiar ailment. Although it is technically possible to be inflicted with Madness in any gamemode, the chance per hit is very very low, but it gradually increases with higher Squad Rating. The exact details are currently unknown.
The standard way to cure Madness is to injure the player severely. If the player has Lives remaining, then he must sacrifice one of those in order to cure his madness. If the player does not have lives remaining, things get more difficult. The affected character must be injured to below 20% remaining Health. Be sure to use a relatively low damage weapon. Avoid anything that can cause heavy damage in a single hit, as this may kill the player outright with a bad missclick.
A Medic can cure madness by casting Restoration then immediately casting Surgical laser. A Chemical Expert can also cure madness with VRL-772. At the moment these are the safest ways to cure this ailment, although both require tier 3 skills.