It's mostly a matter of practice and experience. The Traffic Skills 101 course is a good way to ease yourself out there with a bit of coaching, There's also a Traffic Skills 201 course which looks at more complex situations and a little higher density traffic. Hurst's book is good, as is the new League "Smart Cycling" handbook. The Smart Cycling book also comes with all the training videos used in the TS101 course.

For now, ride where you are comfortable. A little anxiousness is okay, but if you're downright scared, that's a clear sign that you're out of your comfort zone. Practice the basics, and work yourself up to more complex situations when you start to feel more confident about approaching them. Check with one of your local LCIs... I'm sure they'd ride with you a bit to help build up the confidence...