I too am painfully shy......LOL
Seriously I do know a lot of people who are very shy and afraid of failure. I know some folk who throw up just before going onstage.
I also know a lot of folk who like myself relish being the centre of attention and thrive on it.

One thing that may help is to change attitude......People do not laugh at acts or want to give them a hard time.... Most audiences want to be entertained and have a good time so will make allowances for inexperience and give the performer encouragement.
The same applies to fellow writers or musicians listening to others. We are all positive and will give positive feedback and offer help encouragement and advice. Shyness can be conquered by simply facing it full on.....getting out there and doing it. Once you take one step then all the others fall into place. The more you do it the easier it gets and the better you become.

http://www.soundclick.com/bands/songInfo.cfm?bandID=687727&songID=5238055