No, I'm not offended by the displays, but I am often offended by the disrespectful responses to them. Spray painting obscenities on the side of a creche for example.
The whole thing centers around a woman named Madelaine Murray O'Hare, as I recall. She was an atheist, was raising her son to be an atheist, and sued the local school board over having Bible reading and/or prayer in the public school. The response to this upset has been religious people defending their rights, and an attempt to broaden the concept of what religion is, at least so far as public displays (often paid for with taxes) are concerned. After all, we do have a First Amendment which forbids the establishment of a government-sponsored religion.
The problem is not freedom OF religion but freedom FROM religion. Taken to extremes, it means an atheist should be able to walk through life pretending religion is either insignificant or non-existent. Such is simply not the case. Religion is very important, influences decisions most people make, for good or ill, and needs to be acknowledged.
What we need, however, is respect for all religions to the extent possible. Granted, one can hardly respect a religion that makes direct attacks on what you believe, let alone shouting for your death. But if we could learn about what people believe in all walks of life, how people respond differently to the Divine, what symbols they use, rituals they perform, and what they mean to them, we would be a lot better off.
The problem comes when all information seems to be prosyltizing. When all available literature is designed to try to convince you that you should join them. Some even go so far as to say you will be punished for eternity if you do not join.
This is why I especially appreciate the Living Insights Center in St. Louis. It is a unique place, with different rooms dedicated to the symbols of different religions, and respect for all flows through it. People meet there to share their insights, the healing power of brotherhood and sisterhood, and to discover that we are often talking about the same spirit, just using different words and symbols. It's a wonderfully enriching experience.