Literally translating into "my beloved," this word is more than a term of endearment. There's not a day that goes by without "habibi" rolling off your tongue... and to very different desired effects.
1. When you want to tell the world how adorable someone is
"Habibi shoo tayyeb" is a phrase we've heard more times than we can count. Especially, when there's a newborn involved.
2. When you wanna do just the opposite
You're in a heated argument with someone, or in the middle of a road rage incident, and you can't even talk to this person in a decent tone anymore, and that's when "habibi" comes into play. Here habibi sounds more like habibeh to express a distinction between the two meanings.
The sentence starts with a "isma' ya habibi..." and probably ends with a door slam or a fist fight (if you're the hands on type) that echoes in your ears for days.
3. When you want to express love for your partner
This specific type of "habibi" is one that has a certain ring to it, a ring that will make your partner fall in love with you all over again (and possibly put a ring on that finger). Please hear Amr Diab's "Habibi Ya Nour el Ein" for reference.
4. When you want to express your love for someone you met five minutes ago
Who among us hasn't been called habibi by our bank's customer services person... and over the telephone no less? Michael Jackson's "We Are the World," John Lennon's "Imagine" and other songs about universal love come to mind.
"Habibati into kulkom" basically sums it up.
5. When the "condescending" in you comes out in full force
This "habibi or habibte" usually comes with an enunciated eeeeeeee at the end. It's usually the type of word you shove into a conversation to impose some kind of authority. It's counterintuitive, but it's true.
Your friend says something that is totally out of line, and your ego won't have any of it. You lean forward and say: "habibi ... meen mfakar halak?" and it's enough to grind anyone into submission.