I usually say Happy Holidays if i am the first to say it unless I know for sure what the other person celebrates. If they speak first and say Merry Christmas than that is what I say back to them. Now that I am an adult I am not offended by it at all, but as bucky said, when I was a kid it was an uncomfortable time of year for me. It is very difficult for a kid to understand why he is different from everyone else sometimes.
My wife is now in an interesting situation. She converted from Christianity to Judaism (not for me, but for herself). The first few years after she converted she was struggling with dealing with people (close friends) who knew she converted, but refused to with her a Happy Hannukah and instead insisted on wishing her a Merry Christmas. She has realized that she has two choices though. She can let it bother her or she can realized that these are her friends and their goal is just to wish her happiness no matter what words they use. I am happy to say she has gone with the later