Euthyphro for Dummies

"Consider this: Is the pious being loved by the gods because it is pious, or is it pious because it is being loved by the gods?"

When Euthyphro's dilemma is discussed by people like Julian Baggini (by way of Cyberkitten) or even TruthSeeker (by way of Kevin Parry) are they expounding or confounding Plato? Have they discovered a fatal flaw in a God-based system of ethics? Have they pulled the rug out from under traditional religious beliefs?

Baggini says,

"To my mind, the Euthypryo dilemma is a very powerful argument against the idea that God is required for morality. Indeed, it goes further and shows that God cannot be the source of morality without morality becoming something arbitrary."

To my mind, Baggini, from this auspicious start proceeds in circles and gets nowhere, but stirs up a lot of dust doing so. We can come back to Baggini, but for now I want to turn our focus on TruthSeeker. TruthSeeker poses the dilemma to Heather on the pretext of engaging in some intellectual discussion (albeit unrelated to the topic at hand), so I'm not sure what TruthSeeker thinks other than that Heather showed "a total lack of understanding of Euthyphro's dilemma". So I ask TruthSeeker to enlighten us about that here in a forum dedicated to the topic. After that I'd like to know if there has been any advance in philosophy in the intervening 2,400 years on the nature of the good or did Plato write the last word on it?

Near the end of the dialogue, Socrates has become frustrated in his attempt to learn from Euthyphro the nature of the pious and impious and in despair says, "So we must investigate again from the beginning what piety is, as I shall not willingly give up before I learn this." (15c)

I'm with Socrates. TruthSeeker (and everyone else), the floor is yours.