I try to give a big friendly wave and grin... and yeah, I look. However, my response does vary, based on the situation... if someone just cruises by and lets out a honk, they get the wave and grin... must be a long lost friend. If someone is trying to squeeze me and is being dangerous doing it... I will try to give them a piece of my mind... if they are not likely to stop and are just being a JAM... they get the one finger salute.
I give out a lot more waves. I talk to a motorist about twice a year. The rest get what they deserve.