Now that the flame has died down a little, let me throw in my observation.
Andy, the gelato's owner took down the sign only after putting it up for a short time (according to the apology issued by Andy) at the meantime the above photo went viral and his store's online rating crumpled. There are basically two camps on the atheist blogosphere - those did not accept the apology (PZ and JT) and those did (Jen and Hemant) as noted by Adam Lee
To me, an apology should be accompanied by a behavioral change to rectify the wrong. So my question is "Has the store owner demonstrated an understanding of what was the wrong and made an effort to rectify the wrong?" Another question is what is the motivation of the apology?
If the atheist community did not have the leverage of lowering his store online rating, would he issue the apology?
Of course, we can only guess at what actually was in his mind and we are not thought police. From his latest apology, Andy was also offering a 10% to customers in this week - oh, that said a lot of what was going on in his mind. To me, apology not accepted. His motivation is whitewashing and damage control. As JT Eberhard put it, he should have said something along the following lines.
Bigotry is unacceptable. Offense is not the same as breathing life into prejudice. Punishing somebody for disagreeing with you or thinking your beliefs are silly is immoral. Making a donation that will actually help make the world a better place rather than inviting us to patronize your business for an insignificant discount.
Another point I would like to raise is the immoral concept of the Christian forgiveness. The immoral teaching that one can forgive oneself and move on is absolutely wrong. The offended has the right to forgive and move on, but the offender doesn't have any right to forgive himself/herself. When a wrong is done, it is done. There is nothing that can be done to undo the wrong. Remorse is the first step to recovery and to become a better self. Understand what was wrong and make positive steps not to offend again. We can learn from mistakes only when we are still in school (an artificial environment created to tolerate mistake to happen without serious consequences). In life, mistake is mistake. One has to live with the consequences of any mistake. In this case, I cannot see any sign Andy would be doing to become better. He has not started the first step.