A phrase uttered after one has usually lambasted or insulted someones life or lifestlyle. This is pure sarcasam at its best, and if used properly makes the person feel confused, and unsure of what you just told them. The term always means you are actually being overly critical and are just trying to defuse a small amout of your criticism.
dude 1 : How did you like my new girl?
dude 2 : I knew her in high school she used to be a real slut.