from personal experience... I was 265lbs 9 months ago, I am down to 199 just now... still think of myself as a fatty (even though the people that knows me constantly say I don't need to diet anymore and that I lool "skinny" right now... the bastards).
Guess it takes a while for your brain to get used to your new "you", to accept it and to actually say "well, you actually are not fat anylonger"... as for room for improvement, there is ALWAYS room for improvement when it comes to physical appearance, no matter how good you look now. It is for you to decide, when you have reached your goals and set new ones... this is a never ending story