"separation of Church and State" as implied by the Constitution was originally intended to keep the government from dictating and controlling religion. Also, to keep the church from providing political puppets to rule in it's favor. It was never intended to be weilded as a device to eradicate all religous content from every government-sponsored activity.

In America, the purpose of separation of church and state is to avoid 'excessive entanglement' of the two institutions. An important court ruling on the subject led to the Lemon Test, which holds three conditions on a government's actions: that it must have a legitimate secular purpose, must not have the primary effect of either advancing or inhibiting religion, and must not result in an "excessive entanglement" of the government and religion.

The idea that government shall favor no religion for another or make no law that is bias toward one religion and not another.

What it does not say is that elected officials can not be religious. It says they should make no law that favors religion or display favoritism in a public government institution.

Putting a cross in the back of your office is fine, displaying a statue of the ten commandments in front of a court house is not.

An important part of the Constitution that isn't literally written in said document. It's implied, under the reasoning that since we have freedom of religion, any leaning on the government's part toward any one religion would force everyone to only be a part of that religion, and violate their constitutional rights.

the best thing ever! (next wining money or having sex you get the idea)

For all of you conservatives who still use that lame argument that the exact phrase "separation of church and state" must be present in the Constitution in order for the principle in and of itself to exist, I guess at the same token we don't have the "right to a fair trial." Neither do we have the "right to free speech." Oh, and forget about the "right to warranted search and seizures." That said, it simpy DOESN’T MATTER if the EXACT phrase “separation of church and state” appears in the Constitution or not. Separation of church and state is IMPLIED -- and one doesn’t even have to look in the First Amendment for it (I’m not even addressing precedent either here, i.e. Lemon vs. Kurtzman).
Please refer to Article VI, Section III of the unamended Constitution: “but no religious test shall ever be required as a qualification to any office or public trust under the United States.” Joseph Story comments:

Originally cited in a letter from Jefferson to the Danbury Baptists, this small footnote in history was used by Justice Hugo Black in the case of Everson v Board of Education (1947) to justify that:
"(New Jersey) Cannot exclude individual Catholics, Lutherans, Mohammedans, Baptists, Jews, Methodists, Non-believers, Presbyterians, or the members of any other faith, because of their faith, or lack of it, from receiving the benefits of public welfare legislation. While we do not mean to intimate that a state could not provide transportation only to children attending public schools, we must be careful, in protecting the citizens of New Jersey against state-established chirches, to be sure that we do not inadvertently prohibit New Jersey from extending its general state law benefits to all its citizens without regard to their religious belief."
(From Black's Majority Opinion).

However, according to his biographer Roger K. Newman, Black wrote this opinion not to protect the use of public funds so much as to undercut the true meaning of the religion clauses within the constitution. It is also possible that, as a former member of the Ku Klux Klan, Black had a fear of Catholic influence within the United States and taylored his decision to prevent any further Catholics from influencing the course of the country.
The original meaning of the religious clause of the constitution was such that the United States federal government would not set up a church such that all citizens were required to be a follower or in essence be treated as a second class citizen (it should be noted, however, that at the time of the Bill of Rights some states did have individual state religions). Now, the meaning of the religious clause has been destorted such that the people do not have a freedom to practice their religion but have an imagined freedom from being exposed to anyone else's religion. It is especially shown where persons of a Christian upbringing voice opposition to abortion or gay marriage, with the 'sepertation of church and state' group shouting that an elected individual should leave any sort of religious upbringing they had at home and make decisions with a complete lack of religious influence at all.
Furthermore, the appointment of officials such as John Roberts to the Supreme Court has shown that religious litmus tests have become more important than the candidates actual qualifications. This act of testing a candidate or appointee for their religious belief is a much more direct violation of the constitution than the imagined 'Seperation of Church and State' freedom. Article VI, clause 3 of the constitution specifically states:

The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; _but no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States._

The division of biased religious perspective from a government catering to all beliefs. This is contradicted in Bush's ban on abortion for everyone of every religion in the United States that derives from his christian beliefs.

Separation of Church and State is an ideology protecting religious freedom by ensuring government does not interfere to favor or disfavor private religious establishments so long as they practice without violating another's individual rights. The clause also protects from churches and other religious organizations interfering with government practices in an attempt to remove religious freedom so as to favor their beliefs. This clause proposes a metaphorical wall between government and religious establishments, unlike the one-way street idea proposed by fanatical religious theocrats.