I think that whether you lie about your appearance or not depends on what you are looking for.
If you're looking for a serious relationship - friends, lovers, whatnot - then you have to ask yourself the question: do you want to build a serious relationship upon a deliberately skewed representation of yourself? Do you really want to be involved with someone who cares that much about the superficial details? Do you really want to be appreciated as someone who is not you?
I'm sorry if this sounds corny, but there's a part of truth in this - I'm basing myself on personal experience. This is not just moral theory.
If you're simply being a flirt, then the initial approach (seduction) is more of a thrill than the relationship is. The idea is more to make an impression and live for the moment than to build anything lasting. Since you are indeed playing a sort of game, then the rules are relaxed compared to RL - you don't care... so you might as well enjoy it and 'tweak' your persona a bit. Note: That is, of course, if you consider flirting to be an honourable pastime; many people would not consider it so, and I remain neutral on the issue. I'll say that if the other party seems to really care a lot about you - then you're toying with them by being such a flirt, and I think that's bad.
Lastly, if you're roleplaying (MUD/whatever), then fine - be creative! You have every right to be playful with your appearance. That is the whole point of it - fantasy! In that case, I don't see how manipulating your appearance could possibly affect anything, since everyone knows you're creating a character from scratch.
--KW [Diary] /* Do all humans pass the Turing Test? */