They're usually surprised. Some were faintly rude, others were nicer. My canned reply is that they should understand "hacker" in the MIT sense, and that it's not necessarily related to computer security or even computers in general. They usually lose interest at this point.
The most articulate chat that I had was with someone who asked me if I was into social engineering, and explained that he had read _The Art of Deception_ and found it quite inspiring.