Every year new slang words enter the popular lexicon but which ones actually 'stick'? Every since I can remember, 'cool' has been an acceptable word whereas 'groovy' passed out of usage in the 70s. Is there some informal criteria that seems to govern which words remain in popular usage and which pass as a fashion item.
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I always thought that slang would be passed from generation 1 to generation 2 if the younger people looked up to the older people in a positive sense en mass. Even if the kids don't want to be just like them when they grow up, the vernacular sticks and is still acceptable among generation 2.
I like the example in a comment on this page where he says
The next generation (Gen X, right?) still used "cool" because the Fonz and those people like him were still cool (not in the sense of slicking their hair back and walking with their thumbs out, but just the 'who cares what you think, this is what i do' attitude), whereas the hippies were pretty much the anti-metal. Hair bands and punks reigned supreme, but the rebellious attitude (which was effectively nonexistent for society's kids as a whole until the 60s) carried on. "Cool" was still cool. Generation X rebelled even against the hippies, but they may have been able to relate to the somewhat aggressive, always ignorant "cool" rebel of the previous generation.
The same goes for the next generation. The kids you see in high school today are still using "cool" because it's still "cool" to be that slightly aggressive rebel who doesn't always listen to the authority. By now, the kid who outwardly defies all authority is pegged as an anarchist or a weirdo, and in societal terms, usually doesn't get the "cool" recognition (they were the groovy ones of the 60s).
In between, you have brothers and sisters, cousins, etc. of the sparks of each generation, and of course those trends in slang will stay at least somewhat hip (well, not all the time) because big brother or big sister has been using them since these kids were crawling. This keeps those words thriving.
That's just one long-winded example of how you can keep slang sticking in the vernacular through the ages. You can probably do this kind of tracing with any time-tested slang that is still pretty widely used today (booze, bitch, hot (in terms of a woman's attractiveness, not for everything under the sun (no pun intended) as paris hilton would use it), etc...), but I think you'll find that after a third generation of usage, it becomes almost acceptable to use in place of the word that it once substituted, which could be why those bright bulbs over at OED wait for a word to be used for, what, 5 or 10 years before it is added into the dictionary, and by then it's really not slang anymore at all (or is it?)
Ask a 16 year old kid what he considers slang to be and you'll probably be hearing a lot of new words (bring your pen and paper to look them up later)...my bet is you won't hear "cool" even though it's still used a lot today.
I think the process can't really be pinned down. Sometimes a word can fall out of fashion and make a comeback a generation or two later. Sometimes a word becomes so popular it never seems unfashionable, and indeed its origins as a colloquialism will be forgotten.
I think groovy could easily have become as acceptable or popular as cool, but because it was overly tied to an era and a culture specific to that era, it now "sounds" dated. It basically became shorthand to mock hippies and so sounds dated to our ears.
In the 1880s, groovy meant "of settled habits or rutty mind" ie. stuck in a rut. In the 1940s it was used when speaking of jazz musicians being "in the groove." So it passed from beatnik culture to hippy culture to mean "a profound pleasure" or "true joy."
I think in the groove is still quite acceptable, if not popular, meaning "making good progress" so perhaps in time groovy will still make a comeback.
Cool is another word that became popular when describing Jazz music or musicians. Why it became less "dated" sounding than groovy is just a quirk of history. Who knows, perhaps in a few decades "cool" will sound too tied to hip-hop music/culture and if that falls out of popularity it will sound just as dated.