How is the necessary and proper clause related to federalism and state rights?

The Congress shall have Power - To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof. 

The clause grants Congress the authority to make laws which would establish the federal powers, the basis of Federalism (the authority of the federal government vis a vis state and individual powers and rights). The extent of the power and authority of the federal government was the primary concern of the thirteen colonies and the main issue discussed in the Federalist Papers written to advance the ratification of the Constitution. 

For many decades, the interpretation of the Necessary-and-Proper Clause was a powerful bone of contention between the Democratic-Republican Party and the Federalist Party, and several other political parties in the United States. While Democrats expressed concern that the clause would grant the federal government boundless power, Federalists argued that the clause would only permit execution of power already granted by the constitution.Source(s):http://en.wikipedia.org/wiki/Necessary-a...