I've always said, "Merry Christmas", not to make a point, but that's just what comes natural for me. For my Jewish friends I say, "Happy Chanukah." "Happy Holidays" just sounds a tad too diluted, cold and impersonal to me though the use of the phrase certainly doesn't offend me. Like "Season's Greetings", it just doesn't quite capture the warmth of the season. I guess to me, "merry" has a more festive connotation than the trite term "happy."