I've been doing that for many years......here in hard-Left Seattle, I'm constantly subjected to "Happy Holidays" which I answer by smiling and saying "Thank you, and a Merry Christmas to you as well".
If a given holiday has meaning to someone, I wish that they would simply refer to it directly in any greeting that they might care to make. If someone were to greet me with a reference to another religion whose holiday also occurs during our Christmas season I'm equally polite, but this business of being terrified to mention a holiday that's important to you is a very sad elevation of Political Correctness into our common parlance. Political Correctness tends to exacerbate a level of conflict and fear in society, with the unstated message in this case being "I think most people are bigots who will shoot me or sue me if I dare to mention my religion, so I'll leave my spine at home today and use a generic, milquetoast greeting instead."
In order for the Pope's message to be realized, we all need to incorporate his teachings into our daily lives. Saying "Merry Christmas" with a friendly smile is a great place to start, IMHO. The more people hear those words, the more people will understand that it's quite alright to say it.
"getting down off of soapbox now"