Focused on rotor lateral modes, the paper discusses specifics of damping evaluation in rotating machines. Rotors force the fluid trapped in small rotor-to-stator radial clearances to rotate in circumferential fashion. The fluid in circumferential motion generates a tangential force acting in feedback on the rotor. This force direction is opposite to that of damping force. The “effective damping” is, therefore, reduced or even nullified by the fluid interaction effects. The classical measures of damping in mechanical structures, such as Logarithmic Decrement and Amplification Factor, which are used to evaluate machine susceptibility to instability based on documented vibration data, have to be adjusted to include the fluid interaction effects. These measures now represent the measures of Quadrature Dynamic Stiffness (QDS). It is shown that they contain the expression defined as Stability Margin (or Nondimensional Stability Margin), derived from the stability condition of the rotor system. A simple model of isotropic rotor lateral vibrations is used to obtain the QDS measures.