I think that to have religion dominating a country is both bad a good, and it all depends on what the religion is doing really.
Like here in England, there is a Christian basing in our laws and this has helped shape our country into being one of the best places to live and work, with good benefits and free health care and schools etc.
Yet things such as Sharia Law are, in my opinion, very damaging, as it subjugates women to a level that should never happen; with raped women being stoned to death for adultery; and the same goes for hard-line Christians in the South of America, where their beliefs are so fundamental they justify the most disgusting behavior
However, I think that when these religions create systems that are evil and wrong - it is not in the original intention of the God they worship.
'Christians' such a Bush may be destroying the planet, but that is totally against the teachings of the Bible; he should be a 'steward' of the Earth and protect it and all the animals on it, not hurt them and damage the environment; and though there is debate over the amount that war and death is condoned in the Bible, I still believe that it does not agree with going to war over such things like Oil and for more money.
Also, wars have rarely been fought over religion, it is normally a mask for something political or economic, and saying it is done for religious reasons is purely a justification and an excuse.
Christians, like everyone else, can be very good people, and just because there are a lot of people setting a bad example for the religion, it does not mean they are right in any way or following their religion as it was meant to be.