My home town in the north of England was like this. If you make eye contact you say hello. I do the same here. If someone makes eye contact with me I smile and say hello. 

Phil, Hots....i am exactly the same. It is a bit of a surprise for many people when i say hello. I say hello to the security guards at my garden, old geezers having a gander, random people in elevators, but my favourite is little kids. Sometimes you get a hello back but the other night at the bus stop i returned the "chinese nod" to a lady and said hello to her toddler daughter. The little girl screamed when she saw me. Me and mum laughed.

On the other side, I often find that if you say gday to a random gweilo they pretend you are invisible. In this aspect a random chinese person wipes the floor with foreigners as they will almost always acknowledge your greeting.

I say "niiiiihhaaaaoooo" then walk away giggling like a little child. When in Rome and all that ..........

instinct indicates whom to smile at. mostly its reciprocatd.

I do, but only rarely now.

I used to more often,mostly to people in the area I lived, but then people would start talking to me and with my limited Chinese it was just awkward and uncomfortable. Especially when they wanted to start a long conversation that ended with everyone saying what great friends we were ( this was usually in restaurants, not on the street) and could I teach their Kid English now that we're friends? This is while a crowd was gathered watching me try to communicate and laughing every time I said something.

After a while I just got to the point where I didn't want to talk to strangers so I put on the thousand yard stare in public and try to avoid conversation with anyone I don't know. 

I have never wanted to be rude or arrogant, just to be left alone and avoid being the white monkey.

It depends on my mood and how much effort they put into the interaction. I will always try to normally be polite and greet people but that can take a ton of effort from a foreigner. Especially in a place with a high population density where you stand out very obviously, like China. 

I would say I put a little more effort into it if it were random people in my residential area as I am sure they all gossip about how they greeted the foreigner and would make positive comments on my behalf. 

Maybe for the reason that there are too many people in China, that's impossible to greet everyone when u walk in the street.. We just say hi to who we know..

And most Chinese are not as outgoing as Western people, especially in some small cities and towns. They might feel nervous if the stranger say gday to them.

I usually do because I know many people in my neighborhood..

Yes, I always greet, usually with my tongue-out  .

I show it to the kids at staring ....

I always 'hi' on the street at eye contact, sometimes with loud comment (in English or Italian ),  buTT .... then, I rarely 'seek' for males eyes. 

if the individual is not a sleazy perv, with the 'helloooooooo hur hur hur' i will usually acknowledge with a nod.