Should I break up with her and if so, how?

Let me try to sum this up in 5000 characters. We have been going out for a little over a year and a half now, and ever since the first 6 months, she has been treating me like I'm some dumbfound idiot. Like last December for instance; her father got me a cordless drill for Christmas and her reaction was that it was a stupid idea and I quote, "Him?? Power tools?!?" Stuff like that....CONSTANTLY. Also, whenever we have a disagreement or a fight, she always finds a way to turn it around so that it is somehow MY fault. She will then go out with OUR friends and badmouth me all night. She is also an Atheist, where as I am a Lutheran. Just this past weekend, we went to my little brothers soccer game and on the way home we passed a church. She said, and i quote, "Wow! That's a big church! I still have the temptation to burn it down." ...yeah... I didn't know how to react to that because I was just in absolute shock. I understand that she cannot be made to believe anything. That's her right and her opinion. But she should know that it is not okay to say things like that. Especially not in front of her Lutheran boyfriend. I want to break up with her and remain friends, but our families are VERY VERY close. Any suggestions on what I should do?