The separation of church and state is a delicate subject. The argument has gone on for some time. The basic history of the debate is this:
Founding Father support separation of church and state, meaning the state does not form its own church which everyone is required to attend, and nothing more.
Supreme Court is formed.
Supreme Court oversteps its bounds.John Kerry is born.
Bill Clinton outlaws prayer in public school. Prayer may help children to live better lives. Nobody wants that.
Mitt Romney runs for President. Despite being the best candidate, he does not win because he is Mormon.
And there you have it. Now, I want to focus on two sides to the argument - the misconceptions about it, and the needs for it.
The misconceptions:
1: Some people think separation of church and state means the state must have nothing to do with God. Wrong. The founding fathers said the Bill of Rights was written after the 10 commandments. They repeatedly said, over and over, and the union would only succeed as long as we kept our trust in God. America has always been a Christian country.
If I were to go to Israel, or Iran, or any country in that region, and were to attend a soccer game, I would be expected to listen respectfully as they started the game with a prayer after their manner. Would this offend me to listen to their prayer? No. I would sit and listen respectfully. If I were disrespectful, I would use that time to get my refreshments. If I felt too lazy, I may even just sit there and work at that particularly stubborn bugger than had plagued me for some time. But there would be no reason to be offended that they were praying.
If I were going into a government building, and they had a stone plaque out front with an inspiring quote from the Koran, would I be offended? No. If it teaches good principles, then why should I care? It is not forcing me to all the sudden become Muslim. The fact that somebody else prays does not brainwash me into believing what they believe. In fact, reading inspiring things from religions other than my own may even force me to see the good in ways of life different than my own, and may lead me to live a better life.
2: Separation of church and state is not even in the constitution.
Surprise. It is the Supreme Court becoming legislative instead of judicial.
The Need
1: Separation of church and state, however, is necessary in the fact that you can not legislate religion. Religious principles are guiding principles, they are deeply personal to everyone. I do think they should stay that way.
The delicate balance is this: You can't use religion to argue politics. I cringe when I hear people say that if you don't support a certain policy, or if you don't vote a certain way, than God is going to destroy you and the nation. In the scriptures God said that a nation is ready for destruction if the majority of the people choose wickedness over righteousness. That's it.
The other delicate balance is that you can't legislate religion, but you have to let it guide you. If you believe something is important to the nation, but don't do anything about it, it's not only wrong, but weak. I actually applaud the democratic party for changing the official stance of the party on abortion - they now say that the goal is to educate people about the dangers, emotional and physical, of abortion, and to reduce the number of abortions. I think that is awesome. Most democrats are not the crazy feminists that think women should do what they want, when they want. Most think abortion is wrong, but that you can't legislate against people's choices. So what do you do? You teach against it, discourage it, and make it extremely difficult to do. I think the Democratic party needs to do more to discourage abortion, but it's a step in the right direction.
I am strongly against gay marriage. It originates religiously, but I also think it hurts countries where it is implemented (Denmark, Norway and Sweden, for example. It was instituted there in the early 1990's - now the vast majority of children are born out of wedlock. They are finding similar tendencies towards crime and low self-esteem in those children. Marriage rates have dropped and divorce has skyrocketed. But that's a discussion for another day). I do not think that same-sex marriage should be legal. Do I think they should have rights? Absolutely. They should visit each other in the hospital, be legal heirs, etc. We should tolerate their decisions, but draw the line at support. Vocal does not necessarily mean right.

You can't legislate that something is sin. But you can legislate things to protect the nation. Those things may also be religious. That is where most people get their values and ideals, and it will always be that way. And it will be to our advantage if we will always remain a nation "under God, indivisible, with liberty and justice for all."