Humility is a good thing to have. It's folk music, for Pete's sake! It's participatory, it's about community and fellowship and feelings, not technical artistry. (Not that technical artistry is bad, just that I don't believe it should be the primary focus of a session.)
I've seen new people sit quietly in the outer part of the circle all night until they worked up the courage to do a song. Sometimes they barely get through it. Sometimes it's amazingly beautiful and moving.
I've seen the floor yielded to a little girl with a new harp and everyone join in on "Twinkle, Twinkle, Little Star."
I've sat next to, and chatted with someone a couple weeks in a row before I knew his very famous last name.
There are two 14 year old kids who come to our sessions. One of these is a good classical-cum-folk fiddler who was introduced by her classical-cum-folk violin teacher. The other is a phenomenal concertina player - we routinely have to go searching for our socks after he does a tune. I don't think anyone would have brought them, or they wouldn't have had the courage to play, if this were an "elite" session.
I've never heard anyone - audience or musician - complain about anyone's lack of skill. They sometimes talk about people who hog the floor, act like "stars," or don't know when to stop.
Annieglen - if people tell you you're good, believe them - they can see things you can't. There's more to music than technical ability.