My impression of this verse is along the same lines as what Tremble wrote, which is that the point Jesus is making is that we can't look to churches, groups, etc, to find the Kingdom of Heaven. These organizations always fall short, and while fellowship with other Christians is good, I believe people will be spiritually doomed if they start believing that their church is the one true church.
While I agree that the Kingdom of Heaven is within us (as Jesus said), I also understand that there will be a literal (physical) Kingdom at some point in the future, based on what I've read in the book of Revelation. John describes being able to physically measure the kingdom, and that it is adorned with jewels and gold, etc. Does anybody know the part in that book that I'm talking about? I can't recall where to find it.