What should I have said?

[alicefanclub.livejournal.com]

So today I was in class, right? And we were having very informal conversation, as were broken up into small groups. My group was finished with our work, so we were just talking about whatever. Comedians, actually. Anyway, I mentioned that my favorite comedian is Eddie Izzard. One woman in our group, who is older and very religious and conservative, and has on a few other occasions made some random anti-gay remarks, said "Oh who's that?" And I said "He's a British comedian, but I don't think he's really your style." And she wanted to know why not, and I said, "Well, based on some of the things you've said, I don't think you'd be comfortable with a transvestite comedian." And she just said Oh and then immediately she said, "I go to that Curves for Women club everyday, and because of some wording in their contract, there's a man who thinks he's a woman who comes everyday, dressed up and talking like a woman, and they can't kick him out." So after I lifted my jaw off my desk, I said, "Good for *her*." And she just said, "Yeah. Well, uh...he hasn't had the surgery yet..." I was so angry, and I just had *no* idea what to say (the things running through my mind at the time would not have been constructive). I shared the whole thing with my SO when I got home, who said that I should've let her know that her intolerance was offensive to some people, and that perhaps she should be a little more open-minded. And then offer to answer any questions she might have about different issues. So I'm just wondering what you all think. What should I have said? What would *you* have said?