Debt-free = no debt period. No mortgage, no car loan, nothing. The only leeway I'll give is if you have a credit card that you use, and pay off monthly.
If the only debt you have is $50k on a house worth $150k, and $5k on a car worth $15k, then congratulations! You have a positive net-worth. But you're not debt-free.
I guess it wouldn't bother me if it was said like "well, I'm debt-free except for the mortgage; I hope to be completely debt-free in the next five years." I.e. it's not bragging, but pointing out that they still have a ways to go.
Ranting yes, but a similar thing that gets me are all these people proclaiming how they've "retired". One's story interested me, I looked into it...and the guy is simply a stay-at-home dad now. Good gosh man, if your wife is working to support the family and you're staying at home watching the kids, you're not "retired", you're a homemaker! Or the person who thinks retirement means not having to be stuck at any particular job; no, if you require gainful employment to pay the bills, you're not retired.
Come on guys, this isn't Cougar Town, you can't just decide to change the meaning of words on a whim!