When describing a situation and in particular the appearance of a person
You look good.
is a statement about some or all of a person's appearance often with the emphasis on "good", the phrase tends to always be part of a sentence
Those shoes look good with that outfit.
That dress looks good on her.
The feeling is static, as in "run a long distance".
whereas
Looking good.
can be used as a stand alone statement, specifically for effect, especially when "looking" is emphasized. It has a more active, progressive feel as in "running a long distance"
She is looking good in that dress tonight.
Q: How do I look?
A: Looking good!
it also has more of a feeling of "sexual attractiveness" than "look good", and that there may be other possibilities as the night progresses.
One possible way to see the difference is to invert the two words
She has good looks.
She is good looking.
The first is the possession of a characteristic (static), the second is a way of being (dynamic). Possibly most people would rather be "good looking". A quick search of "would you rather look good or be good looking" or "would you rather have good looks or be good looking" reveals that most of the comparisons are against "good looking", e.g. "Would you rather be rich or good looking?"
In general "looking good" has the feeling of
things are looking up
things will only get better