"When is lying okay?"
Lying is okay when it does not compromise your actual beliefs. I'm sure many people would not consider this lying at all, but it's easy to see how it can be. If someone gets a haircut and you think it's good, but not nearly as good as their previous haircut, then telling them that they look better than you've ever seen them is a complete lie and is not OK. Telling them that they look good, plain and simple, without comparison to their old cut is OK, because it doesn't compromise your actual beliefs, even though it might still be considered a lie. Protecting the feelings of others is not an issue to me, because people often place knowing the truth higher than liking what it is they want to know in the first place. And while some would rather hear a lie, I believe that acquiescing them is far from "protective." It can be dangerous for you and them, because it will probably come back and bite you in the ass, directly or indirectly, because every word you say to someone gives them an impression of who you are, and if you're lying, they're getting the wrong one, and there is never a time when doing that doesn't have negative consequences.