I'm sorry this is happening to you. I would request a different social worker. I'd also look into your area's law regarding discrimination, so you can have that to back up your complaint/request.
During our training, we were asked if we'd be willing to support/encourage the religious practices of the foster kids in our home, namely if we'd be willing to take them to THEIR church/synagogue/mosque/temple. We have no problem with that, as long as we can also take them to our church.
I can sort of see both sides here. As foster parents, it is not your job to pass on your religious morals to a child. Rather, one of the things is to maintain their belief system in tact while they are already separated from their family.
Having said that, it's ridiculous to say that "no family would place their child" with a JW family. These children are being removed from their first family, not placed there voluntarily (for the most part). So really your SW said that SHE wouldn't place HER child with you. That has nothing to do with the needs of the children.
As you say, Christmas and the child's birthday are 2 days of the year. Hardly reason enough to keep the child away the other 363 days! Perhaps you could suggest/request respite care for those occasions, and respite foster parents can then celebrate Christmas and birthdays with the child?
Were you asked and are you willing to take the children to their regular place of worship, if they're already accustomed to one? I think as long as they've got that, celebrating two days or not is minor.
Not sure if this would also help, but my sister-in-law is a Witness, and we generally get presents from her sort of in the general time frame of the celebration, but never quite on the actual day. Not sure if this is a valid way around that, but if it would be for you, you may want to tell the SW that you would "celebrate" these days, and simply do generic gifts before or after the actual day. I hardly think especially little kids will know the difference or care.
No matter what, I think the bottom line is that a child is being removed from a home for much worse than not celebrating a holiday, so the SW needs to get her priorities straight.
Unfortunately, yet another example of a SW NOT interested in the child's best interest.

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Karolina
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Adopting our new niece this spring!

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11/29/1998~met soulmate
5/8/03~Married DH
May '08~Start Adoption journey
Oct 22, '08~Homestudy complete
Dec '08-July '09 ~ match w/ 2 bmoms & 1 bgma, all fall through
March 25 - April 25 ~ fost/adopt orientation, PRIDE training
July ~ officially licensed foster parents
Sept 28 ~ 
"V" coming to stay with us for a while!
March 5 ~ Baby V's foster review hearing (she's expected to go home soon!

)
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Dec 12 ~ Find out we have a niece on the way and we're adopting her!
Dec 13 ~ Inform my mom that she's going to be a grandmother
April 6 ~ Our daughter is due to enter the world!