I tend to set high goals for myself. I have absolutely no problem talking with woman. however, when it comes to realizing that someone is worth talking to and worth taking out. It becomes extremely nerve racking and complex in my mind.
Any ideas on how to stay relaxed?
Personally I love challenges but when it comes to this sort of thing i get stuck. When I get stuck I over think, then I dont want to continue. There are some days where I am confident, where I flirt with every girl, but there are days where I cant get passed my mind barrier! So Frustrating. The pessimistic thoughts creep up on me!

Be serious please!

Alex

Check.
Err, what?
Number one piece of advice: Don't bullshit yourself.

After you've admitted that the first two things I quoted can't possibly both be true, you're well on your way to improving. Realize that interacting with other people is a skill like any other, and it's mastery has no limits. Practice at every opportunity, and don't hold yourself over the coals when you make mistakes. Most importantly, keep in mind that you should be genuinely enjoying the process of socializing, if you're primarily attempting to use social interaction as a means to get what you want from people (getting laid) you'll be no different than the guy who isn't interested in guitar but practices songs to play for chicks to try and get in their pants.

That guy is either miserable practicing something he isn't into all the time, or is a miserable failure because he hasn't invested the requisite time to be successful.

Contrast that with the guy who loves guitar, and enjoys every note he plays. He's going to play more because it's something he is genuinely interested in, he's not going to worry that he can't play everything right out of the gate, understands he'll make many mistakes as he continues to learn and improve, he embraces the process and enjoys himself while being intertwined with it.

You're on the right track, you are trying to learn and improve, you're talking to girls, don't be so hard on yourself for not being perfectly smooth (by the way, no one is, we all definitely say and do stupid things sometimes). I think reflecting on this should help alleviate your dependence on the outcome of social interactions, and help you enjoy yourself a whole lot more.