I just read Virginia Attorney General Ken Cuccinelli's opinion regarding the constitutionality of religious displays on public ground during the holidays, including displays of Jesus (pdf document of opinion; Washington Post blogpost on the matter). The sad thing is this: displays of Jesus are allowed on public ground so long as such displays are "not making a religious statement."
Translation: As long as Jesus remains a knick-knack (and not, you know, the Son of God who destroys death, raises up the lowly, feeds the hungry, and inaugurates the Kingdom of God, among other things) He can be displayed on public ground in Virginia, according to the Attorney General.
Truth be told, I'm not picking on Cuccinelli. I just get really annoyed when Jesus is turned into a knick-knack, whether by politicians, marketers, or by fellow Christians who somehow think that a taxpayer-funded "Court House Jesus" is a good idea.
Question: Why would anyone who respects religion want to rob its symbols of meaning just so they could be set on a court house lawn?
After all, the Supreme Court has already ruled that the phrase "In God We Trust" is essentially devoid of religious content and thus perfectly suitable as a national motto. How sad it is that we are glad to render God language meaningless so that it can be fit for a coin.
Dear Government: Please keep your hands off of religious symbols. Religious communities and individuals can practice their religion just fine without your help. Thank you.
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Church/State issues are a favorite of mine.
The Lutheran Zephyr 
well spoken!
Remembering the many images of Jesus that H.S. Wilson assembled, I wonder which “Jesus” might be the most acceptable, and if any would not be considered “real” Jesus. Agreed, government, keep your hands off – that’s what the First Amendment is telling you.
Another question: Cuccinelli’s opinion says that depicting the birth of Christ is ok as long as the government “ensures appropriate content and context.” How exactly would that content be achieved? To me, the clue lies in how you described it (Jesus as a “knick-knack”); Cuccinelli also fairly explicitly lays out how that context can be achieved, by presenting the depiction along with secular symbols that can “insulate innately religious symbols from constitutional attack… [such as] lights, candy canes, wreaths, poinsettias, fIr trees, snowflakes, and red and green ribbons…”
So as long as your crèche set-up on the courthouse lawn is dressed up with snowflakes, lights, and candy canes, you’re good to go.
And… not entirely related, but this piqued my interest: Jefferson’s Act for Religious Freedom remains on the books. Today it’s codified at Virginia Code sec. 57-1. Link: http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+57-1