I have asked a girl who was my friend for a very long time out... her reply was that she needs time to think... now what does that mean? :confused:

It means she needs time to think. Really. It's not some kind of secret code.

She needs to think about whether she wants to spoil your friendship for the possibility of something more. She might need to think about other guys in her life that she may be hoping would ask her out.

She needs time to think. Thinking is good.

it means what it says, she needs time to think! She might think you guys will loose your friendship if you go out and it doesn't work, she needs to think if that risk is worth taking.
if she turns you down, please don't take it to heart, it doesn't mean she hates you, it means she values you as a friend and never wants to loose that, how much of a compliment is that?