First ammendment rights are a little more complicated in a school and with minor children. I think Jiro and Foxrac are closer to being correct on that issue. If students had complete freedom of speech there would be chaos in the classroom and no teaching would get done.
Teachers do have the right to say 'there will be no political discussion in this class.' They can say, "no talking at all" if they want.
The reason this particular incident touches on first ammendment issues is because the ignorant and ill informed teacher told her students that it was illegal to say something bad about the President at all, anywhere, and as a social studies teacher she should have known better.
She also told her students that people had been arrested for something bad about President Bush, and then to 'prove' her case she told a totally different story about a different President, where nobody was arrested. She made no sense at all.
There's no good reason to keep paying teachers who don't know their subject, who teach false information to their students, and who can't control themselves or the class. Teaching our young people is a privilege and an honor, it's not a *right* and if you are teaching lies, you should lose your job.