"You shall not make for yourselves an idol, whether in the form of anything that is in heaven above, or that is on the earth beneath, or that is in the water under the earth."
The people have been through a lot. Oppressive slavery in Egypt. Signs & Wonders by God (aka "Ten Plagues!"). Passover & release. Rejoicing turns to panic as the Egyptians attack. God's salvation (again!) through the Red Sea. And now God comes to speak to them as a group (cute thunder & lightning & earthquakes!). God has set his indelible mark on this people, and now he's ready to lay down the ground rules for their relationships (with Him and with each other).
One of the early commandments God gives in Exodus 20 has come to be known as the "NO IDOLS" clause. the people weren't to make any images, statues, carvings, etc. trying to re-present God. No bulls, eagles, sheep, camels, etc. Nothing to resemble any creature on, above or below the earth.
Author & pastor Rob Bell has an interesting insight on this. He remarks that instead of images of wood or stone, God will use the lives of His people to show the world who He is. I like that. Of course, it adds a bit of pressure to us, too. We must live in such a way that others come to see the Almighty. And that's no idol plan!