The main point is that the congresses paying for prayer services doesn't go against our laws in anyway. It's not a matter of separation of church and state, as that simply means we shall force no state religion and we don't.
My 2 cents here....
There is no "war on religion", there's just a growing belief that separation from church and state should mean more than just "no state religion" as you claim it to be. The government shouldn't be taking people's money and using it to fund religious services. That's the job of the churches, not the state. Period.
And as for this "not wanting religion in schools" business... as an athiest, I call bull. I personally really, really want religion taught in schools. But not preached using all kinds of emotional appeals to convince people to accept it as truth like in church, and certainly not just covering one religion. But when I imagine a mandatory class that teaches students about ALL world religions, their beliefs and histories in a matter-of-fact way... well I think that sounds just dandy.
However, this brings me to a great example of this so-called "war on religion". When the topic of religion in schools comes up, it's often something to do with the Theory of Evolution and religion's answer, Intelligent Design. An athiest (and some intelligent theists) will rightly point out that ID has absolutely no place being taught in a science class, because it's simply not a scientific theory. There's no hard evidence for it that can stand up to any kind of scientific scrutiny.
This is not some baseless attack, it's completely reasonable and justifiable. Science class is supposed to teach science, not religious beliefs... yes, even if they happen to be tangential to the topic at hand. Yet this will inevitably flare up the religious crowd's persecution complex, and alas... that's how we've got this "war on religion" on our hands.