Hmm, that's a tough one. I'm certainly not always gracious - it depends on the specific situation. I, umm, have a wee bit of a temper, and can get pissed off very quickly, which I try not to do, but it happens.
But, I'm getting better at not letting things affect me all the time. I agree that you do have to pick your battles and not let yourself be a doormat, but you also have to decide what those situations are that require escalation. Otherwise - if someone is being a jerk I try to laugh about it - laughing AT them, really, at how ridiculous they are. They make themselves look bad, with no help from me, and it's not worth the effort to do or say anything.
I know some people who just don't feel it's worth the effort to get worked up about, well, anything. That's not me. They believe in karma, that these jerks get what they deserve in the end, etc. Me, I don't see that. Nope. I see assholes making out like bandits. That's why I believe in the theory of assisted karma - because the universe is too busy to take care of everything, so we need to help out. Help people get what they deserve, good or bad. :-)
I guess that doesn't help much. But i think in order to be happy with your actions, you need to be true to yourself. Sometimes rising above it and being gracious just means turning the tables on a person and treating them in a way they don't expect. I admit I do that not out of altruism or grace, but because I know it'll piss them off. So if someone is pushing your buttons - they're doing that because they want to get a reaction out of you - if you give them that reaction, then you're making THEM happy. You'll piss them off if you give them no reaction at all (hard to do but can be totally worth it), or a polite/nice one, which leaves them looking like the fool. I guess that's what motivates me to be "gracious" - the fact that by not stooping to their level, they look so much the worse for it. People like that hate being ignored, which to my mind is the best reason to "rise above" - because it just frustrates the hell out of them. Ha!