"You shall not take the name of the Lord your God in vain, for the Lord will not leave him unpunished who takes His name in vain," (Exodus 20:7).
As you can see, God tells us something not to do. He wants us to not use God's name in vain. What does it mean to not take God's name in vain? "In vain" it means to lack the proper respect and substance belongs in a statement and or intention or God's name is invoked. In other words, to take the Lord's name in vain means to use it in a manner that is not reverent. The phrase, "the Lord's name," includes words such as "God," "Lord," "Jesus," and "Christ." These words are never to be used in any form of exclamation, swearing, or disrespect such as "Oh my ***." They are always and only supposed to be used in a manner that glorifies God.
The entertainment industry is full of examples of people using the Lord's name in vain. A Christian needs only to watch TV, a sitcom, a movie, awards banquet, etc. for a short time in order to hear the name of God invoked by non-Christians in a casual or flippant way. Of course, this is not limited to the entertainment industry. People at work, school, and even our friends and family sometimes routinely use God's name and title in exclamations of amazement, ridicule, and other emotional, explosive situations. This is wrong.
Sometimes people will take God's name in vain by making a joke about God, or some situation dealing with the truth of God's word, the person of Christ, or God in general. Christians ought not participate in any situation where a joke, or in innuendo, or disrespectful intention about God is used in humor.
God told me
Sometimes Christians will invoke the name of God when they say "God told me to..." or "God told me that..." and it turns out that what they're stating is unbiblical. In that sense, they have used the name of God in vain. Unfortunately, too many Christians get a sensation and then immediately say that God told them something. Christians of all people ought to be extremely cautious about invoking God's name to further their own status, interests, or whatever it might be in relation to themselves and to other Christians.
There are many instances where God is misrepresented by false religious systems, movies, radio, magazines, plays, etc. God has revealed himself in the Bible, and we should restrict our understanding and teachings about him to that which is revealed therein. We should never, for example, portray Jesus as being a homosexual or God the Father as being a female. The Lord has condemned homosexuality is a sin, and he has chosen to reveal himself and the male gender. Of course, we know that God the Father is not biologically male. The point is that we ought to refer to God as he refers to himself.
God bless you
Even the well-intended phrase "God bless you" ought to be offered with care. That phrase should not be a casual declaration of well-meaning upon people. Though it is good to pray for others and to want them to be blessed, we should be careful when invoking God. For example, what if you are speaking with an unbeliever who is living in a sinful situation. Perhaps you've had a discussion with him or her and have gently urged repentance. But, the person has no desire to turn from sin. Should you then say to them "God bless you" when you part? I think that, at this point, we should be careful and not urge God's blessing upon those who are living in rebellion against him. Instead, we should ask that God reveal himself to them so they might come to repentance.
Then again, if you're talking to a Christian and in your parting, you say "God bless you," is that okay? I would say that it is if it was intended as a sincere request for God to bless the person. But, if it is a casual, automatic phrase offered just because it's something you do, then I would be concerned that that would be using God's name in vain.
We should only use God's name, title, etc. in a manner that shows reverence, respect, and honor. We should never be casual about it, never use it in swearing, never use it in humor or God is or his name is what is laughed at.