In school today we were told that was only one religion in Central Europe and that it was Catholicism in the medieval times (before the reformation). I challenged her saying that can't possibly be true. If anybody can provide an answer that would be great.
Do you consider heresy or peasants practicing a mish-mash of Christian and half-remembered pagan beliefs to be religions? Otherwise, your teacher is basically correct. Christianity did spread northward and eastward, so depending on what time and place you're referring to there were outright pagans. But Central Europe was ostensibly Christianized by about 1000.
Edit: oh, and obviously Judaism.
Perhaps Catharism, a dualist sect that has things in common with the Manichaeans. (That article is from the Catholic Encyclopedia and has good historical detail, though the language doesn't always maintain a veneer of objectivity.)
In his biography of St. Francis of Assisi, God's Fool, Julien Green suggests that many of the troubadours of the 11th and 12th centuries were Cathars and helped spread it. (As did merchants; Francis's father, a successful and upwardly mobile clothier, and by all accounts hardly an intellectual, picked up some Catharist beliefs along the way - maybe from his suppliers.) The Cathars were not formally organized, had no discernible religious hierarchy, and were impossible to count as in a census; their numbers and their influence will never be known. However, the Catholic Church took the movement fairly seriously as a threat to the established religious order, and one of the reasons that Francis's way was so admired by many in the Church establishment was that, by renouncing possessions and even a permanent address, he set an example that out-Cathared the Cathars while always remaining a loyal Catholic.
(If you're interested in medieval religion, I can thoroughly recommend God's Fool; Green was a wonderful writer, and his book has been praised by both Catholic and secular scholars.)