"Bless you" is usually said after a sneeze. :)
Some people use it as an interjection: "And then my brother cooked dinner, bless him." In this case it's usually in a kind or thankful context. My British work colleague does this often, but in general it's not a common habit.
The only time I remember hearing "God bless you" was when a class greeted the teacher: "Good morning Mrs Johnson, God bless you." ...is that still done nowadays?