(1) n. A shit eating grin is a very wide and, to the outside observer, stupid looking grin, usually showing smugness, self-satisfaction, or inner humor. The term is most often seen in the expression "Wipe that shit eating grin off your face!", usually said by the aforementioned outside observer. This observer-based definition makes "shit eating grin" the negative counterpart to "You look like the cat who ate the canary." While the two expressions describe the same grin, they have very different connotations. This definition has nothing to do with the term "shit eater".
(2) n. Someone donning a forced smile in an uncomfortable, embarassing, or compromising situation could be said to have a shit eating grin. Because an uncomfortable situation is much more closely related to "eating shit" than smugness, it is plausible to assume that this is the first definition, although far from the most common, and that the above definition is a result of drift from this one.
Both of these uses are documented in the Oxford English Dictionary no earlier than 1957.
(2) Forced to admit defeat, the politician managed a shit eating grin as he called for and end to "bipartisan rhetoric".
Right D: "Yea that shit eating grin on his face makes me want to wipe it off with my skate blade"
In any situation it's best to be the person wearing a shit eating grin as opposed to the person who just ate shit. The person wearing the shit eating grin possesses both self-control and inner contentment concerning present circumstances. (possibly but not always at someone's expense) .
Many women love a shit eating grin, as it expresses the mystery of inner laughter as well as a completely unabashed authenticity regarding another person. All without blabbing on about some bullshit she probably doesn't care about.
A shit eating grin is one of the most powerful/sexy smiles in the world when expressed correctly.
T: Wipe that shit eating grin off your face!
J: What grin?(while still smiling)
J: (normal face) Alright Tom get up let's go.
T: No!!!! I'm going to go home and write an article about how butthurt your smile makes me feel!!!
J: (grins) o.k. Tom you do that.