I just read recently that there are about 14 different religious holidays (or holy days, if we must) between Thanksgiving and New Years. I don't know all of them, but obviously there's Hannukah and Kwanza (and Festivus for the rest of us), so saying "Happy Holidays" just takes them all into account - you don't necessarily know the religion of the person you're talking to, and to me, it's just common courtesy.
Just keep in mind that if you are insulted by someone wishing you "Happy Holidays", they may be just as insulted by you wishing them a "Merry Christmas", especially if it's not their holiday.
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