The following comes from the book For Men Only by Jeff and Shaunti Feldham. This is a great book for men to read about how to understand their women better. It's not too long, gets straight to the point, and I'd definitely recommend getting a copy for yourself.
Erase "fine" from your response options.
Fine is not fine... Fine is what you mumbled to Mom when she asked you how school went.
One wife mentioned that if she asked at the beginning of an evening how she looked, her husband would typically say, "You look fine, sweetheart." But as she put it, "I worked this hard for fine ?"
I think guys say that word because we simply misunderstand the real question. When she asks how she looks, we think she's wondering if she looks presentable. But what she wants to know is if she's still rocking our world--like she did on that first date. So "fine," sort of by definition, tells her, "No, you're not rocking my world."
I think this is a great point, and one we would all do well paying attention to. Next time you're tempted to say "fine," remember: She doesn't want to know if she's going to embarrass you in public or not. She wants to know if you like what you see.