Pinksoil,
Yes, unfortunately MI is one of the last prejudices that are still acceptable to bandy about in public. Your coworkers wouldn't make racial generalizations, now would they? Of course not!
I experienced something similar recently. A coworker was describing some friends of hers and how they had their hands full with a son who had schizophrenia. And she said she was so glad she didn't have to deal with "anything like that."
I wanted to jump up and choke her. I think your reaction was much kinder, laughing inside.
Off to T I go.......