The falicy in Rehnquist's argument in Wallace v. Jaffree is his premise. The name of the doctrine of Separation of Church and State may have come from Jefferson's letter, but the legal substance was derived from James Madison's Memorial and Remonstrance of 1785 and the Virginia Statute for Religious Freedom.
Jefferson wrote the first draft of the Statute for Religious Freedom, Madison revised it, the Virginia General Assembly made a few changes and finally entacted it 1786.
FS
Hi Fred,
Bit of an old post to drag up, but I don't mind.
I grant that the two documents contain in substance the "separation of Church and state," although the statue prohibits only substantial government support of religion - I can't see that a merely verbal acknowledgement even of a particular religious body as the true religion would be contrary to the Statue on Religious Freedom, but it certainly would be illegal under the modern version of the "separation."
But I'm hardly convinced that this is the interpretative key to the establishment clause of the First Amendment. Madison himself (as Rehnquist quotes him in Wallace) describes the purpose of the clause as follows: "Congress should not establish a religion, and enforce the legal observation of it by law, nor compel men to worship God in any manner contrary to their conscience." The legislative history of the Amendment, as Rehnquist relates it, sticks closely to this understanding, and it seems to have been the originally and generally accepted one (which I reckon the proper test for the interpretation of any law). Now this is rather different from the regulations of the Statue on Religious Freedom.
Personally, I consider Rehnquist's mistake in Wallace to be not protesting against the supposed incorporation of the establishment clause. I think Justice Thomas is much closer to the mark in his opinion in Newdow.