It definitely depends on the situation. Cute is one of the most ambiguous words ever. I hate it. If a friend of yours (girl) calls you "cute" when you solicite it, like ask for her opinion, then it probably means you're only ok, or that she isn't attracted to you.
But if a girl (stranger) approaches you and tells you that you're "cute" then its most likely a good thing. If a girl does this she most likely means cute as in good looking or hot or something, but since she doesn't really know she doesn't want to come out and say that you're hot.
Also another thing I've noticed is that girls use "cute" when around the guy, but use "hot" and "sexy" or whatever else when with their friends, and not the guy.