I would imagine President Bush was referring to the prophecy in Revelations 20:7-9. Basically in this case, it means nations who are an enemy to the people of God... not so much crazy talk imho, considering that nations really like to fight each other these days.
I'd say it's crazy talk when you are using that as an argument (among others, of course) to convince a french president (whose country has a clearer separation between state and church than the US) to go to war.
