For my generation, this is our equivalent of the JFK assassination or the 9/11 attacks.
My own story is as follows. I was in 11th grade at the time at Hunter College High School. One of our school's Chemistry teachers, Francine Salzman, had applied for the Teacher-in-Space program but not been accepted. So we were all keenly aware of the meaning of the launch.
The school's lunch period took place from 11:10 AM to 12noon, if I remember correctly, and after eating lunch I went to hang out in the school library with friends. I know that a lot of people's stories include watching the launch live on television; for some reason, our school hadn't bothered to set anything like that up for us. So we weren't watching.
But we got the news, and this part I will never forget. I was sitting in the front area of the library when my friend Christina Sormani walked in and asked if I had heard the news about the shuttle. I said no, and she told me that it had blown up during the launch. I protested that she was kidding, and she assured me that she wasn't.
I realized she was serious and I started to cry. I cried so much that Tina thought I personally knew one of the astronauts. I didn't, of course; at the time, like all of us, the only one I could actually name was McAuliffe. But I was crying for them nevertheless, and for the dashed hopes and dreams of an entire human race that yearns to go to the stars. I knew that this would cause a major setback in our space program; and I could only hope that it wouldn't crush it entirely.
That afternoon, when we got home, there was an ironic coda. My father had been applying to the Journalist-in-Space program, and on that very day we received the postcard from NASA indicating that all his applications materials were in.