It is sometimes followed up by "none taken." The recipient of the original comment says "none taken" to signal that they were not insulted.
Joe: Sally, you've put on some weight
Sally: *slaps the shit out of Joe*
Joe: No offense, Sally, you've gotten fat
Sally: None taken. I guess I should go on a diet. .
2. Something that is used by someone to make it sound acceptable.
2. No offense Kipper but your sister has the ugliest bitch i've ever seen. You'd have to be totally wasted to take a ride on her.
Alaa: lol (OMG im so glad he said no offense or i would of taken it offensively)
Joe: Oh, that's okay, 'cause you said 'No offense'.