I'm happy when I can muster up legitimate vanity (because I used to hate how I looked), but I don't think it usually tends to go beyond "Holy shit, these pants *do* look good" (obviously in situations where applicable)
That is about as far as my vanity goes. But I don't say "I know" to compliments!
I can't make judgements on whether a person is good or bad looking until I meet them, generally. It is subjective and I can't force my opinion on people, saying that I am right about it.
If I like someone, I really don't care if they are fat or thin. They could be pink with purple polka-dots and I would still like them.
When someone says, "Oooh, look at them, they are so ugly", it makes me want to say, "You are ugly for making that judgement."