You did the right thing. It is CRITICAL that you are professional, caring and civil - especially in front of your son. It shows by example that problems can be resolved.
As for what that teacher said in front of your child - OMG... I have HUGE HUGE issues with that and absolutely you did the right thing by going to the principle. I"m glad they were willing to work with you.
Here are some examples that happened 'back in the day' with me - ones that show that is okay to help your kids :). Oddly - I had issues with English teachers/Profs. Who knows why! lol
In 9th grade (HS) I had an English teacher that was USUALLY a senior English teacher. He HATED that he was teaching 'low lifes'. None the less, he was a pervert. He was gross and inappropriate with the girls. Swiping hair, touching shoulders in ways that in the early 80's even THEN we knew was not right. It was happening to ALL the girls in the class. None the less I had told my mom about it and said 'I'm sure it will change, he just has to get over that he is teaching us and not seniors'. Little did I know my friend who sat behind me in class was also telling her mom the same thing. Her mom and my mom were friends and the subject came up. They went to the counselor and principle and asked for the WHOLE CLASS to be moved - yup, in the middle of the quarter. It was done within 2 days! Of course the teacher was THRILLED because he got rid of us - but word on the street - bad things went into his file. He was still a teacher, but gone were the 'extra' things he could do after school and helping with activities, etc. I wasn't in on the counselor/principle conversation but I'm sure our parents were strict about what the options would be. As much as it was 'horrifying' to think my mom and dad were at the HS, in the end, life was much better.
In 11th grade I had an English teacher that graded A's or D/F. Period. I was so frustrated. I wasn't GOOD at writing reports, papers, etc and just needed guidance - even if it was comments on my paper. My mom talked w/the teacher who blew her off and then she talked w/the counselor. The counselor INSISTED that ALL my papers, past and present be graded by another 11th grade English teacher. She graded them from a B to a C- accordingly. I didn't get moved, but it showed that he was not doing his 'teaching job' and ALL the kids were affected - for the better. My friends knew it was me. I didn't care. I had to look out for me, it was MY grade and I needed my parents help.
In COLLEGE... I was taking a shakespear class - only English that would fit into my schedule. Ugh. I muddled through. He graded 1-7 and never knew if you were up or down. Amazingly, I worked at a Tutorial Center and talked with my supervisor. I wanted to add a note to my final paper requesting feedback (I never had any no matter how much I asked - I even went to office hours, etc). I added the note and the response - in RED INK across the paper "What are you expecting, a Harvard education?". I still have this paper. I had taken it to the Dean. This teacher was tenured, but believe me, the Dean was FURIOUS - took a photocopy of the paper to put in said prof's file. I did get a B out of that class - how, I have NO IDEA!
I guess what I'm saying is that it is important to fight for our kids and our education. No matter how angry we are at the situation, something can usually be done to take care of the situation. It may take some creativity, but it is plausible. I think our kids need to know that we trust and believe in them and will stand up for them when it is right. There will be times when they are turds - really! But in the end, I will be there for my child and get to the bottom of whatever is happening.