Hi Andy, it is a gergal way to say: You look awesome! or : You look great! Commonly used by youngsters (I would never imagine a 40-year-old using such an expression) You use it with people you have some kind of close confidence with and yes, it is a very positive compliment. You can use it also in a reflexive way: "Sto da Dio", meaning "I feel awfully good!"

No special occasion. It mean you are looking fine, the dress you wore suits you particularly well, no doubt you changed your look but made the right choice.