I don't know the ins and outs of the Arizona religious freedom bill that Republican Governor Jan Brewer is considering now. However, I'd like to comment on the issue in a very broad sense.
People have a right to choose who they associate with. The government should only be able to force or prohibit associations when that is the least restrictive method for satisfying a compelling public interest. (And I'd define "compelling public interest" very narrowly, likely limited to life-or-death situations.) As a consequence of this right of association, people are free to discriminate in their personal lives for or against whomever they want. Unjust discrimination is immoral, but not everything that is immoral should be illegal. Business owners have a right to grant or deny service to whomever they choose; employees have a right to grant or deny services to whomever they choose; and owners can fire employees whose choices conflict with their own.
People also have a right to choose and exercise their religious beliefs, but in the context of business service I think this right is largely subsumed by the right of association. A person's religious beliefs will be one factor he uses to choose his associations, but he is free to choose his associations based on any criteria he prefers.
(Note: the government does not have a right of association and cannot be allowed to discriminate unjustly. The government is a representative of all the people, and does not have the right to treat one person different from another without a compelling reason.)