Mishka, thanks for sharing your perspective as someone who is working on addressing this issue. It is really, really helpful! In particular, I would be interested in knowing if there is anything that a spouse/partner can do to help someone realize that the compliments we give them ARE sincere.
GIMA, I learned this piece about criticism and low self-esteem from my clinical work and my H's behavior. To the world my H is very confident and gregarious. They would never guess that he has low self esteem. I think that is why he is so threatened by true intimacy and is hesitant to move in that direction. Another poster (AliSuddenly) is piecing with her BF who has the same problem. Ali is really, really good about posting feedback from her BF about his thought processes now that they have reconciled. This might provide some insight to you or others.
With my H, from the beginning (through the wonderful early years) H told me he didn't like it when I said ILY because he thought it wasn't genuine. He had a difficult time believing it. I believe this came from his childhood with an alcoholic mother and absent (and I think) somewhat critical father. To me this understanding has given me a lot of compassion and patience with H for his actions. I certainly have my own foibles and baggage from FOO so this gives me NO sense of superiority ---- just understanding.
GIMA, you said in your post that you got along well with W's parents during lunch. Is it possible that she perceived that they favor you? This might have added to her flare up of this symptom. I found the book "Receiving Love" by Harville Hendrix to be very helpful in understanding this issue. Hendrix talks about the impact of losing both his parents before 6 years of age on his ability to receive love from others. He didn't realize this was an issue until after he had been practicing psychology ~20 years or so and was having marital problems of his own.