It's very, very common on the west coast, quite literally ALWAYS used in a pejorative (or at least mockingly pejorative) sense, and almost always used in conjunction with "all", ie "all gussied up". an example of usage would be if you're expecting an evening at home, and your SO walks into the room damp from a shower, smelling of cologne and in fresh clothing ~ you raise a brow and ask 'why are you all gussied up? going somewhere?'. i've never, ever heard someone compliment another by saying 'wow, you're sure gussied up tonight!'.

i agree with the preceding posts, that it implies primping ~ excessive primping, in fact. i may have not read clearly enough, but if someone hasn't already mentioned "trussing", i somehow always make a phonesthetic mental link between trussing a bird for a feast and getting all gussied up.