I usually nod or give the friendly finger wave to cyclists passing in the opposite direction, and always return or acknowledge a greeting when I am passed (it may no tme more than a gasp on a hill!). I also say "good morning" or "on your left" on those rare occassions when I pass someone. I always say something to pedestrians when I pass them - part greeting, part warning that I'm there. In fact, I'm so used to saying "good morning" to people on rides, since I generaly ride in the morning, that I often say it in the afternoon, which is really embarrasing!

I do get annoyed when fast "serious" cyclists come flying out of nowhere and pass me on the left (and sometimes on the right! ) with no call out or anything - it scares the daylights out of me!