Well I would say the OP handled it well and like a good neighbor. I have had a couple encounters with my neighbors when I first started OC.
One I was washing the car and put the XD on the hip and washed the car, one neighbor (gun nut) asked if I was afraid of being mugged or jumped in my driveway while pointing to my weapon. I simply said Nope. and left it at that. He carries when ever he is out and understands my stance.
The second time was with one of my friendly neighbor that I have never really talked to a lot and not sure of his stance on weapons. He asked if I was becoming a cop or somthing (he saw me on my way out) I told him I am a firm believer in the 2A and explained a little about local laws. I also informed him that it was not the first time I had a firearm on around him. He gave me the raised brow and I told him that when I have it concealed then it is concealed.
The one other that made an impression was I went to introduce my self to a new neighbor. (I live in a military neighborhood off base) He asked if I was a cop on base or somthing. I kinda gave him the raised brow and he said he thought he saw me with a pistol on my hip the other day. I told him he probally did see that and explained the right to bear arms and again a few of the local laws. All said and done he said if the crap hits the fan that he will be at my house. I offered to give him some range time and training if he ever feels he wants to be able to protect his family himself incase I am on vacation.
Just thought I would share a few of my encounters luckily (knock knock) I have not had any bad expericenes or memorable ones with LE's.
"The purpose of war is not to die for your country. The purpose of war is to ensure that the other guy dies for his country." - General Patton