Humans respond better to praise than criticism, even when the praise may be unwarranted. Although most software interfaces strive to avoid evaluative feedback, praise is demonstrably more effective than providing no evaluation at all. Further, many interfaces designed as neutral are often perceived as critical by users, because they rarely get positive feedback when things are operating normally, and error messages when things go wrong. Similarly, wording that tells the user that there is a better way to perform a task implicitly criticizes the user.
Because characters create a social context, careful use of praise and criticism is even more important than in a traditional user interface. While few people enjoy sycophantic behavior, the limits of the liberal use of praise have yet to be demonstrated. Praise is especially effective in situations where users are less confident about their performance of a task. On the other hand, criticism should be used sparingly. Even when you think criticism is appropriate, be aware that humans have a tendency to dismiss it or redirect it back to its source.
However, avoid self-praise unless it is a humorous part of the personality the character projects. We tend to judge self-conceit with skepticism. If you want to direct approbation to a character, have it directed from another source, such as another character or descriptive explanation.