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.
What? "In God We Trust" on coinage, the government is favoring Christianity over other religions. I feel this violates separation of church and state. I shouldn't have to be preached inside of a court house or inside of a school. If I want to hear preaching, I could go to church or temple or a mosque or whatever else their is.
Radical Fundamentalist: No you don't! That clause represents a one-way street. Government is not to interfere with churches but churches can control the government and limit the rights of non-believers!
Wiccan: I hear Iran is lovely this time of year.
The government CANNOT give preference to any religion, yet we still have "in God We Trust" on our currency, "One nation under God" in our Pledge of Allegiance, and legal marriage rights are dictated by the Church.
There may be no restrictions on religion.... well almost. Numerous Supreme Court cases have allowed for some restrictions (no polygamy for mormons, no peyote use for some native american religions, and no animal sacrifices for some religions, i guess) but these restrictions are for EVERYONE, not just against a particular group (so it's technically not discrimination).
Essentially, people are free to BELIEVE what they want (even if they aren't allowed to PRACTICE their beliefs in some cases) and people are free FROM religion.
Marriage is both a legal and religious institution. WTF? Don't we have separation of church and state?
Guess what? I believe that a giant spaghetti monster sits on a throne of meatballs and laughs at all of humanity's follies. I can believe what I want.