I don't believe it is my place to say that a particular interpretation of the verse is correct and another is not. In fact, I believe God often shows people different things using the same verse because he has different things for them to learn at that moment. But I will speak as to what the verse means to me.

The whole book of James is amazing. It is by far my favorite book of the bible. This verse pretty much sums it all up, it sums up what being a Christian is all about. It's about serving others and striving to remain pure. But I see even more than that in there. I really like the way this translation puts it:

James 1:27(NIV) Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world.

See, it isn't just saying that we need to keep ourselves free from sin, but that we need to keep ourselves from being polluted by the world. We need to keep ourselves from adopting the worldly mentality. We need to focus on a Godly world view, one where serving is more important than being served, where giving is better than receiving, where accumulating wealth is a sign of disobedience and not one of success, a worldview that values all human beings equally and doesn't seek to draw divisions or place greater value on people from this country or that country or this color or that color. That verse tells me to ignore the lies the world tries to convince me of, and to live for God and for the service of others.

I yearn to live a life of pure and faultless religion.