The relevant part (From Scienceblogs.com):
"Let me just clarify," O'Donnell pressed. "You're telling me that the separation of church and state is found in the First Amendment?"
"The government shall make no establishment of religion," Coons said, summarizing the gist of the specific words in the First Amendment's establishment clause.
"That's in the First Amendment?" O'Donnell asked again, eliciting further laughter from the room.
O'Donnell's defenders (Limbaugh, blogs, etc.) are spinning it such that "She was right" that the constitution does not have the phrase "separation of Church and State" - when she clearly did not know that the constitution says that the government shall make no establishment of religion. She was arguing at the time that public schools should be free to teach creationism or "intelligent design" if that was what people in the local school districts believed. She did not get that teaching religion in public schools violates the constitution.
The Separation of Church and State comes from a letter that Thomas Jefferson wrote clarifying the intention of the first Amendment:
"...I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion, or prohibiting the free exercise thereof,' thus building a wall of separation between Church & State."
The phrase was quoted by the United States Supreme Court first in 1878, and then in a series of cases starting in 1947. The phrase itself does not appear in the U.S. Constitution, although the First Amendment of the Bill of Rights states that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof."