I offer discounts for regulars, meaning clients who see me consistently more than once a month.
My version of a discount varies, depending on the situation. Often the discount means that I spend more time without charging extra. I don't normally watch the clock anyway, but with clients who see me weekly, for example, I'm not bothered if we end up talking for an extra half hour or more. I don't book my appointments close together anyway, so I have that extra time to spend with my most loyal patrons.
If a regular client sees me for an hour twice a month and prefers to pay a bit less, then I knock 10% off my hourly rate and I'm not quite as generous with my time.
It's never based on looks however, and I would never see a client for free. That would blur the line between business and personal and it's very important to never do that, no matter how much like a friend some clients can become when you see them frequently and learn about them from talking about what's going on in their life.
As for better service, if the chemistry is really good or the client does something that really gets me turned on—and that's something you can't predict or anticipate prior to meeting a client (and for me seldom has much to do with looks)—so-called "better service" just happens because I really get into the session. Mind you, I always give good service regardless.