Catholics, Where is the Papal infallibilty line drawn?

I was recently in a discussion regarding this with another Catholic and I thought I had the definition clear. I understand that the doctrine itself was a post reformation development declared of necessity, but that the supremacy of Rome in doctrinal matters was always accepted historically by the "Sensus... show more I was recently in a discussion regarding this with another Catholic and I thought I had the definition clear. I understand that the doctrine itself was a post reformation development declared of necessity, but that the supremacy of Rome in doctrinal matters was always accepted historically by the "Sensus Fidelum". Obviously I understand that the Pope is a man, not a God. A sinner who can make mistakes about the weather or double-book appointments. I also understand that an "Ex-Cathedra" pronouncement from the chair of the Bishop of Rome in communion with the council of Bishops regarding faith and Morals is infallible. But is every comment in every Papal Bull regarding faith and morals infallible? Does the power of infallibility extend to the teaching authority of the Magisterium? Is the Catechism for example infallible?

Here is the meat and potato[e]s of the the discussion we had;

At one time a teaching of the Magisterium was that outside of the Church there was no salvation. Which certainly appears to be a pronouncement regarding faith (infallible?). Post VII however this has been changed and it has been made clear that while the Church does possess the fullness of the truth, there is salvation for our separated brethren outside of it.

How do we as Catholics reconcile this?
Update: @ sr.hola; Catholics edited and canonized the Bible. Now your using their book as authority against them?
Update 2: @John S. Thanks for providing the links and creating a well thought out Catholic response...much better than the pasted spam the "Catholic David" provided
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