It is most relevant when you're getting the better of somebody right in front of their face without them realising it. When you want to draw attention to the fact that you're pwning them, simply declare that you're 'wearing their glasses'.
If you're 'wearing your own glasses', that means that you've pwned yourself accidentally or absent-mindedly. (If you accidentally chopped off your hand while cooking, for example.)
The phrase comes from a Perry Bible Fellowship comic strip (entitled 'Q. P. Inc') where the protagonist attends a job interview for Quick People Incorporated and manages to dumbfound the interviewer by somehow stealing the glasses right off his face without him noticing.
"You're just telling me what I want to hear." - "Actually, I'm just wearing your glasses." - "... Welcome aboard."
(Noticing that all the beer has gone) "HEY! Did you drink all my beer?"
(Drinking the last beer) "Actually, I'm just wearing your glasses."
2. Getting the better of yourself accidentally.
"Man, my back hurts. I was carrying some heavy boxes and I slipped and fell down a flight of stairs. I was really wearing my own glasses that day."
3. Getting bested by somebody else.
A) "I've finally finished this damn project, now I just have to save it."
B) "You haven't saved it yet?"
(A's baby brother pulls out the power cable.)
A) "Damn it!"
B) "Heh. Looks like your kid brother is wearing your glasses tonight."