Article II, Section I of the U.S. Constitution, requires the President of the United States, upon assuming office, to take the following oath:
"I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."
Two key elements of that oath are not part of the Constitution.
But every since George Washington put his hand on his family Bible, to show his commitment to that oath, and added the words, "So help me, God," those two elements have been an integral part of the tradition of the swearing-in ceremony.
In fact, the selection of the Bible itself, be it a family heirloom of the president or a Bible with historic significance (such as the one used by Washington or Lincoln), is a major decision each incoming president makes for his inauguration.
Now, an atheist group has filed a lawsuit in federal court to block Obama from saying, "So help me, God." And that's ridiculous.
The Constitution only prohibits the government from creating or endorsing a state religion. It does not prevent any member of the government from being religious, or expressing his religious beliefs (it fact, such expression is protected by the Constitution).
If Obama chooses to use those words, and place his hand on a Bible when he takes his oath, he should be allowed to do so (he will). And if any court rules he can't, then I suggest they have a U.S. Marshall standing by to arrest him when he does so.
It is more than mere tradition. It is appropriate. For any president who is religious at all, it demonstrates how seriously they take the oath.