what does it mean that man was made in the image of god?

Christian Doctrine    The Purpose of Man is to Glorify God!      

Then God said, "Let us make man in our image, in our likeness"...So God created man in His own image, in the image of God He created him; male and female He created them.  Genesis 1:26a, 27

'Image' and 'Likeness' are interchangeable in this verse.  We are an image, in the sense that we are a 'reflection' of God.  Like our reflection in a mirror, the image is not an exact duplicate of ourselves, but it resembles us.  It is not us in the mirror, but a likeness.  We have qualities, reflected in finite terms, of the God who created us.  This gift to us is a tremendous gift, and it enables us to seek and to commune with Him.

Outwardly, we appear as creatures like any other part of creation.  We are made of organic tissue, defined by our DNA sequence, and have material needs (food, clothing, etc) to survive.  In this manner we are seemingly common with the rest of the creation.  But we have also have a nature to us that is unique.  We have been given the gift of God's image, and this is evident in our ability to reflect some of the traits of God.   

God is supreme over all.  He placed us a little lower, and gave us dominion over all other living things.  He is Spirit, and we have the notion of a spirit within us, that gives us self awareness and enables deeper needs such as love, relationships, etc.  He is life, and He gave us life, in a mortal sense.  It will end, and this issue, perhaps over all the others, draws us toward the life giver.  He is the Standard of the universe, and He has placed into us a sense of this.  Our sense of right and wrong, happy and sad, purpose and non-purpose all reflect the universal standard. 

When we realize the importance of this gift of God, we realize the significance we have in His sight.  We are indeed the crowning achievement of His creation.  The fact that He entrusted to us a glimpse of Himself ensures every person's right to feel special, needed, loved, and to be treated as such.  With God all of mankind is equal, and special.  No particular person has a higher place with God than any other (except Christ.)  The image of God we have ensures our significance in His sight, and explains the reason why He is reaching out to us, through Christ, to fix the effects of our turning away from Him and rejoin our appropriate place which is in communion with Him.  It is only with Christianity that man has a purpose external to himself, and that all men and women are equal.

You made [man] a little lower than the heavenly beings and crowned him with glory and honor.  You made him ruler over the works of your hands; you put everything under his feet.  Psalm 8:5-6

It is the spirit in a man, the breath of the Almighty, that gives him understanding.  Job 32:8 

The lamp of the Lord searches the spirit of a man; it searches out his inmost being.  Proverbs 20:27

Rich and poor have this in common:  The Lord is the Make of them all.  Proverbs 22:2

 The image of God within us is a great gift from God.  What we choose to do with it, however, is up to us.