We talk about pagans as "heathens" in some of my religion classes, but its important to remember that a) a pagan was any person who didn't believe in the Judeao-Christian God and b) its in a historical context, thousands of years ago in most cases. This is probably why I've never really felt insulted when people used the term 'heathen' to describe pagans. That's how it was back then. I don't think anyone's ever called me a heathen in an attempt to insult me. It only really comes up in classroom settings.

My children have called me a heathen for years. I take it as a term of endearment However, it was just this past Yule season that I was called Godless for the first time.

One of my co-workers came to our office to let us listen to a christmas song (Reba, I think). There were of course references to God in the song, and he turned to me and said "I hope all this talk of God doesn't offend you."
At first I was rather stunned, because most people that know me know I believe in many, many God/esses. Then I found it funny. I did mention to him that I DID believe in God....all of them. And no, I don't kick puppies for sport or anything.

I think it is all in perception. How can you insult someone, if they take it as a compliment?