WHat you say to her has nothing to do with her hotness, if you look a little deeper, it has to do with her confidence. Of course it would be reasonable to say hotness is a good indicator of how confident she is with her looks, it isn't always true. Most girls I know have serious self-image issues, even if theya are georgous.
If I were to go with the DJ Bible I would say 'no no she is just finishing for compliments, neg her!'. In reality this isn't true. Try and read her, is she joking? Insecure? What do you think at that time? Negs work wonders if you know how to use them properly, but they are kind of hit or miss. It's more of a new guy tactic and I think it often gets misused. You don't need them.
****y and funny will work if you are actually funny and in fun mood. It has to be congrent with yourself. You don't need it. As much as I use it, and the important part, I enjoy using it, I wouldn't alway reccomend it.
To get around all of this here's something you could try. Encourage her on her looks, but make it very clear looks don't matter to you because you have an abundance mindset. "Yeah your pretty, but so are a lot of girls, your lucky your cool *smile*". If you don't know her too well "Yeah your definately pretty, but what else do you have going for you". Or you could just build it up and keep her guessing: "Hmm... *look at her questioningly* well you have nice hair but... mmm... I think.... Yeah, your definately pretty".
That's just all off the top of my head. See what you can come up with. I think my idea fits more people and is more 'natural game' then trying to neg her or be c/f if you don't know how to. ****y/funny should have been called confident and playfull in the first place. Although you wont learn to use them unless you try it, I've worked out where it doesn't work so I can use them. It's up to you what path you want to take.