^ Ditto, and "she could see the beauty in someone when they couldn't see it in themselves" or summat like that.

Mind you, in OOtP (going by Snapes Worst Memory) I thought it was likely that Lily and Lupin dated - he seemed more her type than James at the start. They were both Prefects, so spent a lot of time together - plus Lupin was quiet and bookish, but as daring as his friends. He was the 'nice' one, and if that's what James became later on, then it would follow that Lily liked that type of guy.