"I Believe We Already Had This Conversation!"

by Anne
(Oregon)

Dear Miss Manners,

Last year my husband and I went to a inn for Thanksgiving. There was a pre-dinner cocktail hour where all guests gathered, about 40 people. Some of the guests were veterans, many were new comers. It was a lively party where there was a lot of mingling, small talk about,where everyone was from, family, etc.
Later at the family style dinner a woman sat down next to me. I remembered her from the cocktail party where we had exchanged a few pleasant words. She was seated on my left, she had the end seat of a long table. As soon as I could I started talking to her. A minute or two into my introduction she stopped me and said "I believe we already had this conversation" I was so flustered and embarassed I just mumbled I'm sorry and turned to the person on my right and had a lovely conversation and a great time.
My question: Is it ever OK to say I believe we already had this conversation?? It seems to be such an unnecessary and hurtful thing to say. I think most of us just smile and endure the few minutes of repetition then move on to another topic. I feel a little bad because I never talked to her thru the rest of dinner. what should I have said? done?