if you don't need to know the exact insult, what about:
CHARACTER 1: (alien letters, unintelligible)
CHARACTER 2 reacts with horror, as if he's just been insulted. Anyone else in the room looks puzzled.
--this would be showing rather than telling. The reaction shot says a lot more about the level of insult and leaves it to the reader's imagination what could be so insulting.
There are MANY alien fonts out there, mostly labeled things like Miskatonic (I like that one), that would serve. That way not only can't you read it, you can't pronounce it either, and readers won't be stopping in the middle of the story trying to read the caption or parse it out when they need to stay IN the story.
Hope that helps.
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Nano 2007: If Wishes Were Horses (winnah!)
Script Frenzy 2008: IWWH, the GN. OMGWTFBBQ.
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