If it's safe to wave, I do. If not, I'll nod. Sometimes I don't see the other rider until it's too late to respond.
At intersections/stop lights, I rarely try to talk to other riders just b/c it's tough to do through a full face helmet over engine/traffic noise, but I certainly acknowlede them.
Most riders that I've encountered return the response but, of course, there's a few that don't and they're usually on HD's or HD clones. Nothing to sweat either way.
PS: I can totally understand not wanting to wave in places like CA and FL where bikes are much more numerous. Wouldn't wanna spend my entire ride with only one hand on the bars. Here in the DC Metro area bikes are few enough that waving doesn't take much outta my riding time.