Generally speaking honestly is the best policy, but sometimes it's not. Tends to be when dealing with bad people. A bad person is somebody who wants your harm or wants you to suffer; either a little or a lot, depending on how bad they are. In other words wishes you not succeed and feels joy when you fall. Horrid as it may sound some individuals for one reason or another (mainly down to jealousy or envy) are like that.
If you cannot avoid those bad people then it's best it's best to give as little information as possible. Don't lie, but don't give them a complete picture either. Speak only when spoken to and never say too much about anything that matter or has any value in your life. This way you'd be sure not to have any issues with them. Never try to make a conversation interesting by adding topics and make the environment AWKWARD! Strange as it may sound this is a good thing. I am not asking you to be rood, but don't give them ammunition to shoot you down. Any value to your conversation will be used against you. If you must speak, then speak about things you don't care about or have no importance to anything, as they're likely to disagree.
Spotting these individuals is quite easy in the real world (maybe not so online). They tend to feel joy when you suffer and feel sadness when you succeed. From experience they tend to be egotistical know-it-all's who suffer from the jealousy gene as I like to call it. They seam to have something at stake, either their pride, ego or loss of something they desire or love (could be anything e.g. a person, possession, art etc.) and they fear this the most. The eyes are the path to our souls, and as Tony Montana once said "They eyes never lie, chico" - http://www.youtube.com/watch?v=V3Rac4VkLto
Sometimes good people have connections to bad people. and it's never ideal if people speak among themselves. I live in a fairly small community where the news is what people say, and the real news is just there for typical purposes. Having said this, people are connected to all kinds of people, and you might find a good person connected to a bad person. If those people speak about you then you'd just fuel the other person's negativity towards you. If you never see that negative person then it's don't matter much.
There are several tricks to diffuse bad people and make them on your side. From experience it's not worth it, but it might help get them off your case and find somebody else to target, which is always preferred.
I always say the truth to everybody I associate with, I ensure that it's in a tasteful manner so that they don't get upset or angry, and eventually they become accustomed to my straight talking approach. I am always open to criticism and rarely become defensive or angry towards others.
Now in web design I find honesty to be the best policy. When selling I believe we have to be honest with our clients and what we do, otherwise you won't be able to sell. Strange as it may sound a good sales person is one who people trust, and what better trusting person to one that is actually saying the truth. I make sure I can justify my prices, justifying what I am selling, and let them know they are getting value for money. For me this works. Took my a while to learn, but I guess you can't sell steak to vegetarian's. Sell people what they want, and what they are willing to give.
pfff! Hope this helps.