Another perspective: I read somewhere (probably in a Kevin Hogan book) that by downplaying the compliment, you subtlely imply that the other person's judgement is faulty. Obviously this is not your intent, but the other party
could certainly perceive it that way.
Example:
Me: You did a great job putting together those TPS reports!
You: Nah, not really, I think I misspelled some words and the font was too small
Me (verbally): Oh, I'm sure it wasn't that bad...
Me (mentally): So not only did I overlook those misspelled words (lack of attention to detail), but my ability to judge quality work is faulty as well?
Stop insulting the other person!

Tom