Guest,
My mom, a Baptist minister's wife and holder of a Master's in religious education, told me recently that she used to think, as you do, that 
XMAS was non-religious, taking Christ out of Christmas.  Then she learned, as referred to above by Walrus, that the early Christians used the "X"--the Greek letter "Chi" (or Rho superimposed on Chi) to stand for "Christ."   They were not taking "Christ" out of "Christmas" any more than it changes the meaning of "Sunday" to abbreviate it "Sun."
To them -- and now to her -- this is in no way derogatory or sacrilegious.

Some non-religious folks may see XMAS as less religous than "Christmas," but these folks aren't being reverent when they write "Christmas," either.  It is simply a short form, derived from a letter (symbol) representing "Christ."

Genie the P.K.

BTW, Doesn't Gary Larson have a cartoon about "Murray, The Fourth Wise Man, Who Brought Fruitcake?" I can't remember the rest of the cartoon. Maybe someone else can.