This verse from the Gospel of John is often used against Catholics because we don't use the terminology "born again" when we talk about a relationship with God.
Here's the 411 on the above verse...at some point I need to have the great big "A-ha!" moment where I "get" what Jesus, the Incarnation, the Crucifixion, the Resurrection, the Ascension, the lives of the saints, etc. is all about. If I simply go to Mass every Sunday but I don't invest myself into the faith, then I've missed the point. There is an idea from the theologian Jeroslav Pelikan that I love: the living faith of the dead versus the dead faith of the living.
The living faith of the dead looks like this: I live out the faith of the Catholic Church with pizzazz! That's right, pizzazz. That doesn't mean that I have I to stand on the street corner and preach, but it does mean that my faith infects every moment of my life. People should see Jesus when they look at me. Or, at the very least, they should wonder 'why is she the way she is?' Sure, there are going to be times I totally mess it up, but then that is when I seek forgiveness with pizzazz; forgiveness with my whole heart and soul. This faith is like the famous quote of St. Francis of Assisi, "Preach the Gospel at all times and when necessary use words."
Dead faith of the living looks like this: I go to church on Sunday because that is what I'm supposed to do because it's what my parents do. Once I leave I don't think about church or God or others until the following Sunday when I begrudgingly get out of bed to go to church again. This is dead faith that simply imitates what was done by others before me.
Which camp are you in? Are you in the dead faith camp? Or do you have pizzazz?