Teaching about religion is allowed in public schools. Teaching Bible lessons in science class is not.
Individual students or faculty may pray during their down time. School sanctioned prayers are not allowed.
Religion in public schools is not terribly complicated: the school may not endorse or discriminate against any set of beliefs or lack of beliefs.
I will admit that this does raise some questions, of course. How should public schools address holidays that are celebrated in both secular and religious ways? May teachers wear certain types of religious attire, and if so, what types? Are guardians allowed to take children out of classes that they are ideologically opposed to?
These questions, tricky as they may be, are very different from whether public school-led prayers are acceptable.