From Common Errors in English:
"A.D." does not mean "after death," as many people suppose. "B.C." stands for the English phrase "before Christ," but "A.D." stands confusingly for a Latin phrase: anno domini ("in the year of the Lord" -- the year Jesus was born). If the calendar actually changed with Jesus' death, then what would we do with the years during which he lived? Since Jesus was probably actually born around 6 B.C. or so, the connection of the calendar with him can be misleading.
Many Biblical scholars and historians, and archeologists prefer the less sectarian designations "before the Common Era" (B.C.E.) and "the Common Era" (C.E.). I've heard the whole "CE" and "BCE" thing absolutely railed against by Christians, but really, it's less confusing. If you're a Christian and it bothers you, take it to mean "Christian Era" and "Before Christian Era" and it would mean the same thing and you could still use the new acronyms without feeling guilty or anything. Just my own two cents.
All of these abbreviations can also be spelled without their periods.