Dumb thing for her to say, but unless Hillary decides to use it in an attack I don't see how big of a deal this will be. In six months when the general election campaign is heating up, no one will remember this. Americans can't even remember what they ate for breakfast.
The strategy to defuse this will be for her to declare her love for America over and over again in high profile interviews and talk about how proud she has been to be an American during her adult life. I doubt the Obama campaign wants to have a retraction of sorts, which would give the story legs. There will be a Larry King interview, or a 60 Minutes interview where she will go on and on about her love for America.
Still, I can't get over how dumb a statement that was. Apparently this was a written speech and she said the line twice, so apparently someone thought it was a great message. Michelle doesn't have the silver tongue that her husband does, she's had a few gaffes.