Do children of Muslims have the "seed of Islam"?

From an [MSNBC interview with Franklin Graham](www.youtube.com/watch?v=xScMJHcIecw) (starting about 3:05): > **Reporter**: You've said in the past that President Obama's father was Muslim, so that President Obama has the seed of Islam, I believe is how you put it, in his blood... > > **Graham**: No, it's not in his blood. Under Islamic law, under Sharia Law, Islam sees him as a son of Islam because his father was a Muslim, his grandfather was a Muslim, great-grandfater was a Muslim, and so under Islamic law, the Islamic world sees Barak Obama as a Muslim, as a son of Islam. That's just the way it works. That's the way they see it. But of course he says he didn't grow up that way, he didn't believe in that, he believes in Jesus Christ, so I accept that. So I'm just saying, in the Muslim world, they see him as a Muslim. 1. Is it true that the son of a Muslim has some special standing within Islam, even if he rejects Islam? 2. What is this special standing (referred to both as "son of Islam" and "seed of Islam" in the interview)? What is the scriptural and/or historical context of this special standing?