Usually only my manager asks me "what's up, Dick?"(since it is another version of my name and he uses the double meaning), so I respond with "That's exactly what's up." He reacts with the same disgust every single time because he never remembers me saying it the previous time around.
My brain is pre-programmed to say "not much" or something along those lines, even if there is some major event happening. So in certain situations it kinda goes like this: Person: "What's up?" Me: "Not much..." Me: "OMG did you hear The Move was a total hoax?!!"
I usually take it to mean "What's happening" and proceed to give them the rundown of everything that is currently happening in my life.
You say "oh, not much." Just like when people ask you how you're doing, the answer is "oh, pretty good." Can't be too unspecific here.