Yeah, i'm slightly skeptical on exactly what she meant when she said that. She was free-diving though, which is slightly different than straight up breath holding as with breath holding you are focussing on being able to hold your breath. With Free-diving you are supposed to let yourself go and not think about it. The world record for longest free dive for women is 9 minutes and 11 minutes for men, so it is theoretically possible.
Here's what she said:
“I had to learn how to free-dive to play that role in Avatar, and that was just incredible. My longest breath hold was seven minutes and 14 seconds, like crazy, crazy stuff.”
"My first words were: 'Am I dead?' Yes, I thought I'd died!" said Winslet, before dishing on how exhilarating the experience was. "God, it's just wonderful. Your mind completely drifts off. You can't think about anything, you can't make lists in your head, you're just looking at the bubbles underneath you," she continued.