many good comments here .. I just want to second some thoughts. I have performed for many years, to audiences, large and small. I still allow my nerves to affect my performance (unfortunately). I've just gotten better at pretending they don't! I also know that once I get rolling, the nerves go away. So I start with songs I love, and can play backwards in my sleep.

... and it also true for me that the size of the audience or the noteriety of the venue is not neccessarily a factor in my nerves ... it is the importance of the performance to me that makes it more or less nerve wracking. It can be harder for me to play a new song to a few friends in the living room than to a large audience at a concert hall!