I think what she means is that although she strongly disagrees with atheism, if you were an atheist she would not mean that she doesn't respect you as a person. The way she said it did seem somewhat arrogant though.
I personally wouldn't take offence to this, as I'd have to admit that I'm the same way. I have absolutely no respect for Christianity, but that disdain is for the religion, not the person who follows that religion. However, I can't say that I entirely seperate the two. I have slightly more respect for an atheist than a Christian.
I think I have to agree with David here... I don't think the person in question really intended an insult.
I have this kind of thing happen often and I have to keep reminding myself that I am fighting many, many generations of misinformation regarding religion. I have no control over how people were raised or how they've been lied to for so long. I can only push back gently and hope others do the same. Over time, and with help of the clear-minded, we may be able to expose the myths for what they are.
Do as you wish (obviously) but I recommend just letting it go. If she presses the issue, you may have to let her know that her being catholic doesn't offend you but you'd really rather not discuss it. :)
Sounds like a take on the 'Hate the sin, love the sinner' line that some christians use.