My husband heard a rabbi say he was talking to a congregant and she asked about his daughter.
"She's 2 years old now," he told her.
"Poo poo poo," said the congregant, uttering the words that often accompany "Kneine harah" ("without the evil eye"), the popular Jewish concept that even my non-Jewish friends know about.
"She does that too," said the rabbi.
I laughed when my husband told me this, but the congregant in the story did not. She was offended. The rabbi apologized to her and explained how ayin harah, as it was first mentioned in the Torah, refers to jealousy: We do not want to make others jealous of us (which causes their "evil eye" to look at us), so we need to be humble and not flaunt our blessings. However, it also doesn't mean we must go overboard chanting words to prevent the blessings from becoming curses.
There are so many different schools of thought in Judaism about the ayin harah. If you go to a mekubal, a Jewish mystic, one who often impresses others with seemingly supernatural insight and foresight, he may give you a blessing to protect you from it. If you speak to some Modern Orthodox, Lubavitch or Traditional Jews of a certain age, you may see that they -- more prevalently than others -- use the phrase "kneine harah" (Yiddish) or "bli ayin harah" (Hebrew).
One friend of mine has her own take: "Ayin harahs are only true if you believe in them."
I think that what the Rabbi was trying to say is that it's best to behave modestly and with a heightened concern for the feelings of others. You really can't go wrong with that approach -- regardless of what you believe.