Of course she is thoroughly wrong, incorrect, misguided, and ignorant.
This is what she said--or rather, what the voices in her head told her to say:
"Go back to what our founders and our founding documents meant -- they're quite clear -- that we would create law based on the God of the bible and the ten commandments.
"What in hell scares people about talking about America's foundation of faith?" Palin continued. "It is that world view that involves some people being afraid of being able to discuss our foundation, being able to discuss God in the public square, that's the only thing I can attribute it to."
If Sarah ever studied American history, she would have read this:
Founding Father Thomas Jefferson when he was asked to call for a national day of fasting and prayer:
"But it is only proposed that I should recommend, not prescribe a day of fasting & prayer. That is, that I should indirectly assume to the US an authority over religious exercises which the Constitution has directly precluded them from.... I do not believe it is for the interest of religion to invite the civil magistrate to direct it's exercises, it's discipline, or it's doctrines; nor of the religious societies that the general government should be invested with the power of effecting any uniformity of time or matter among them. Fasting & prayer are religious exercises. The enjoining them an act of discipline. Every religious society has a right to determine for itself the times for these exercises, & the objects proper for them, according to their own particular tenets; and this right can never be safer than in their own hands, where the constitution has deposited it."
Unlike most governments of the past, the American Founding Fathers set up a government divorced from any religion. Their establishment of a secular government did not require a reflection to themselves of its origin; they knew this as a ubiquitous unspoken given. However, as the United States delved into international affairs, few foreign nations knew about the intentions of the U.S. For this reason, an insight from at a little known but legal document written in the late 1700s explicitly reveals the secular nature of the U.S. goverenment to a foreign nation. Officially called the "Treaty of peace and friendship between the United States of America and the Bey and Subjects of Tripoli, of Barbary," most refer to it as simply the Treaty of Tripoli. In Article 11, it states:
"As the Government of the United States of America is not, in any sense, founded on the Christian religion; as it has in itself no character of enmity against the laws, religion, or tranquillity, of Musselmen; and as the said States never have entered into any war or act of hostility against any Mehomitan nation, it is declared by the parties that no pretext arising from religious opinions shall ever produce an interruption of the harmony existing between the two countries."
James Madison--one of the principal architects of the US Constitution:
"Madison contended "Because if Religion be exempt from the authority of the Society at large, still less can it be subject to that of the Legislative Body." Several years later he wrote of "total separation of the church from the state." "Strongly guarded as is the separation between Religion & Govt in the Constitution of the United States," Madison wrote, and he declared, "practical distinction between Religion and Civil Government is essential to the purity of both, and as guaranteed by the Constitution of the United States." In a letter to Edward Livingston Madison further expanded, "We are teaching the world the great truth that Govts. do better without Kings & Nobles than with them. The merit will be doubled by the other lesson that Religion flourishes in greater purity, without than with the aid of Govt."  This attitude is further reflected in the Virginia Statute for Religious Freedom, originally authored by Thomas Jefferson, but championed by Madison, and guaranteeing that no one may be compelled to finance any religion or denomination.
... no man shall be compelled to frequent or support any religious worship, place, or ministry whatsoever, nor shall be enforced, restrained, molested, or burthened in his body or goods, nor shall otherwise suffer on account of his religious opinions or belief; but that all men shall be free to profess, and by argument to maintain, their opinion in matters of religion, and that the same shall in no wise diminish enlarge, or affect their civil capacities."
None of this easily researched American history will stop Palin from shooting her mouth off. She doesn't know what she's talking about, has no knowledge of American history; but in her self-satisfied ignorance she believes her stupidity is shared by all Americans.
When will her defenders stop defending her indefensible stupidity? How can her supporters explain her mush-headed nonsense?
Just think, this uninformed light weight was nominated by the reckless John McCain to be vice president of this country--a heart beat away from the presidency. She doesn't know basic American history. But she's absolutely convinced she's a leader, and incomprehensibly, many people agree with her.
Ms. Palin, please point out the law in our Constitution that prohibits Americans from working on "the Lord's Day." And tell us about the law that prohibits Americans from "taking the Lord's name in vain." Also show us which law tells us to "honor our mothers and fathers," and how that is punishable under US law if we don't. And after you find that, please tell us what the punishment is in US law--Constitutional Law--for not worshipping the god of the Old or New Testament, or for worshipping other gods--or no god. If our laws are based on the Bible and the 10 Commandments, Hindus, Buddhists, Mormons, or persons of non Biblical faith or no faith at all would be outlaws. But you wouldn't let that obvious fact get in the way of the giddy fatuity that you so eagerly pass on to your fellow ignoramuses.
Keep talking, Sarah. Each time you open your mouth, we discover more of your boundless stupidity. And for those who believe the Left is "afraid" of Palin, the truth is that, of course, we're not. We actually want the woman to continue to broadcast her amazing ignorance so everyone can observe, with horror, the joke she truly is.
Sarah Palin's ignorant imperialism.
By William Saletan
"Sarah Palin thinks Barack Obama is a wimp. She's been going around to Tea Party rallies, invoking the spirit of revolutionary Boston and castigating Obama for failing to exalt American power and punish our adversaries. She seems blissfully unaware that the imperial arrogance she's preaching isn't how the American founders behaved. It's how the British behaved, and why they lost. Palin represents everything the original Tea Party was against."