it's called being polite and acknowledging your existence. you're looking at her, it's good manners for her to smile or say hello. now if she's looking at you and smiling without you looking at her, then maybe it means something.
What I do when I see a cute guy walking by is smile, make eye contact and when he smiles back I bite my lip, look back for just a sec and then look away ;)
well when someone looks at me I usually smile at them because it is the nice thing to do. it would be rude to stare at them blankly, right? it has happened to me where someone will just look back at me with no expression and it is a little off-putting, so I would never want to make someone else feel that way, so I just smile at them! :)