>>Are they offended if you tell them to deliver the greetings to the sender? As in "Send him my regards, then". BTW, I've heard this in other parts of Germany as well (I think both around Düsseldorf and Stuttgart), but then those may have been cousins of my hosts.
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>Sometimes it really is just common usage as "Bless You" when sneezing is now. I can't speak for today, but when I was in Germany for 3 years around Bavaria, Grüß Gott was so common among all ages and when I inquired about it, it was almost never meant with it's literally meaning.

Hi Tracy! Nice to see you replying to my three-week-old post :).

For sneezing, though, I've found nazdravlje/Gesundheit/egészségedre (all meaning the same) much more common. It appears to be, from what I've found, in memory of the great plague, when the afflicted who started sneezing were the recovering ones.