The questioning begins at about 2:50 above. You can view the entire story over at the blog. But here's a taste:
The AP is correct: debate generally does not center around whether the federal government can “establish” laws instituting a national faith or favoring one religion over another. However, there is wide debate about whether the Constitution prohibits government from dabbling in religion at all. And not everyone agrees that O’Donnell was questioning the establishment of religion, as much as the complete abandonment of it. ...
[Still], it does appear that O’Donnell concedes the point at the end of the exchange. But maybe she shouldn’t have. Maybe she didn’t realize that she was on to something. And maybe instead of being faulted for asking the question, she should be scrutinized for not understanding the nuance.
After reading the entire story, feel free to add your comments below.