When someone says "Bless your heart," or in the third person "Bless his little heart," the meaning behind it can vary greatly. The phrase has been appropriated outside the South because it just seems nice, but that's not at all what's going on in the conversation if you're a Southern woman. And Southern women originated the phrase, so they should know.
Bless your heart is not really a compliment. It sounds sweet as pie, and sometimes is said affectionately about pitiable situations, but it’s often acid-tongued because you’re pitiful and did something you shouldn’t’ve but were too dumb to know better, which is why it’s a perfect saying to export from a region that has hung on for dear life to its manners because it has little else to boast about that isn’t problematic, like the food, or the music. Hell, the manners are problematic, too. Some people call it “nice meanness,” but the ability to sound proper while being awful is a central tenet of Southern identity, and you see it best these days in their holdover sick burns.
The first time I read about outsiders using the phrase incorrectly, the example of proper Southern use was, "He don't have the sense God gave a goose, bless his heart." It's like jargon, slang, or a dog whistle in that the real meaning is only clear to those who know the culture well. Read about the misunderstanding of the phrase "Bless you heart" as it spread outside the South, at Mel magazine. -via Digg