First of all, this should be in the off topic section
In response to your post, well I'm jewish. I am offended by that sign, but if a christian came up to me on Chrismas day and say "Merry Christmas" to me, I would say "Merry Christmas" back. It's sort of like acknoledging their holiday. Actually, ony about 2% of America is jewish, and now you're just going to throw islam into my face. But I don't think that anyone should be offended by a christian saying to them "Merry Christmas!" Just be polite and say "Merry Christmas" back! You don't have to be offended. It's like acknoledging their holiday. By doing so, you are complementing them, on some level. Here's a little anecdote for you:
Every shabbat (for non Jews out there, that's a holiday we have every friday at sundown until sundown on saturday) my dad's coworker says to him (that friday, right before shabbat, before my dad comes home from work), "Shabbat Shalom" --which means in hebrew "Good/Peaceful Sabbath." Now this guy is a devout Christian. But he's ACKNOLEDGING our holiday! It's kind and polite.
Now if I were to initiate the conversation with a Christian that I knew I would say "Happy Holidays." Why? Because it would be misleading if I said "Merry Christmas." They would think that I was Christian or had recently converted (I think, I don't know much about Christianity, and which sects allow that, but moving on). There is a difference between acknoledging and condoning.
Them: Hello, Merry Christmas!
You: Merry Christmas! I'll see you tomorrow at [work/school]
You: Why, GERALD! Merry CHRISTMAS!
Gerald: Uh, Merry Christmas. I didn't know that you were Christian....
Them: Merry Christmas!
You: *slap* (as goes the example given by the previous post)
I hope you see the difference in these three. This is just my opinion on the phrases.
Happy Holidays Everyone!