What is Tolerance?

What is tolerance? Am I tolerant of other peoples beliefs? These are questions that have been running through my head since I had a disturbing conversation with a friend of mine. She accused me of being intolerant because I told her that I believed her belief system was wrong. The accusation caught me completely by surprise.
To understand why I was so surprised, I need to give you a little background about myself and about the conversation we were having. I'm an extremely non-confrontational person. So unless I know the person very well, I avoid having conversations with people about religion, politics, and belief systems. I avoid them like the plague.
I have definite opinions and beliefs, but am much happier agreeing to disagree with someone than I am arguing them with. If I think that voicing my beliefs to a person will cause conflict, I usually just stay quiet.
So back to this particular person who thinks I am intolerant. I've known this person for several years. She has a rather forceful personality and is just about the opposite from me when it comes to conflict and voicing her opinions. So needless to say, I've known almost as long as I've known her, that her opinions and beliefs were strongly in conflict with mine.
Anyway, she and a few other people were having a discussion about the existence of God and hell. Everyone present, including her, knows that I'm a Christian. But I was mostly keeping out of the discussion. Unfortunately this time, I was not allowed to keep out of it. She started pressing me about whether I believed non-Christians would really go to hell. I didn't really want to tell her yes, because I knew that would upset her. So I tried to deflect the question, but she wouldn't let me. So I finally told her that yes I did believe that. She then said the following, "Well I don't believe that. Are you saying you think I'm wrong?" Since I had already put myself into hot water with her, I figured I might as well go all the way. So I told her that yes, I thought that her belief was wrong. That is when I she accused me of being intolerant of her beliefs.
So back to my original question. What is tolerance? And am I intolerant?
Well, I don't really think I'm "intolerant." I strongly believe that everyone has the right to believe what they want to believe. I don't think anyone should, or even can, be forced to believe in something that is contrary to what they "believe." I have no problem accepting people who believe differently from me, as evidenced by the fact that I've been friends with this person for several years. So why did she tell me that I'm intolerant?
I think it is because she, and much of our current culture, has redefined the meaning of tolerance. Tolerance to me means that I put up with and "tolerate" beliefs I don't like, and that I think are wrong. In her mind that isn't true tolerance. She has equated tolerance of beliefs with acceptance and equality of beliefs. In her mind, in order for me to tolerate her beliefs, I must also accept that they are equally as correct as mine. Which is impossible. Since they are contradictory, they cannot both be right. One or the other must be wrong.
I personally am incapable of taking that strange middle ground that she wants me to. A place where somehow both views are right at the same time. I simply can't do that. I either need to abandon my belief and take hers, or I need to believe that her belief is wrong. One or the other is wrong. I've taken the position that her belief is wrong, but I've also taken the position that she has the right to be wrong. Does that make me intolerant?