In Meyers v. Loudoun County Public Schools, the Fourth Circuit rejected a challenge to a Virginia Recitation Statute which provides for daily, voluntary recitation of the Pledge of Allegiance in Virginia's public schools. The Court held that the Pledge is not a religious exercise and does not threaten an establishment of religion. According to Judge Karen Williams:
If the founders viewed legislative prayer and days of thanksgiving as consistent with the Establishment Clause, it is difficult to believe they would object to the Pledge, with its limited reference to God. The Pledge is much less of a threat to establish a religion than legislative prayer, the open prayers to God found in Washington's prayer of thanksgiving, and the Declaration of Independence.
The New York Times has this story on the opinion.
Here's another article on the case from The Examiner.