Hi, meeshee!
Congrats on the festival! I know what you mean about feeling excited and nervous. I've done four craft fairs now, and I've got another one coming up next month, and I'm really looking forward to it. I find craft fairs to be energizing and fun.
I'm a shy person, too, but I really enjoy the craft fairs. The people who come to the craft shows are generally in a good mood and having fun, so there's usually a good vibe going on. For me, I find I am most comfortable standing behind my table rather than sitting -- I don't know, it just feels weird to me to sit, I feel like I should be standing. And I smile at everyone who approaches my table and I say hello. I try to read their body language -- if they seem like they just want to browse and not chat, I let them look in peace. If I feel like they would be open to talking, I may say something more to get things rolling. I may ask them what kind of fragrances they like, or point out my newest soaps or soaps on sale, if I have any. If they're looking at a flower-y scented soap, I may point out other flower-y soaps, etc. And a lot of times, people will start talking to you and get the conversation going. It's really fun when they have soap stories of their own! Don't put a lot of pressure on yourself to think of things to say -- it seems like conversations just kinda happen and that's cool.
I think it's best to be friendly and approachable, but not necessarily "on" all the time. I have to admit that when I approach a booth as a customer, it makes me a little bit uncomfortable if the seller is all over me. I like a smile and a hello, and I like feeling like the seller is accessible without hovering. I have had the experience like PurpleMolly was describing, too, where the seller kind of ignores customers, and that's a bit of a turnoff. Maybe they want to just let people browse in peace, but I still like a friendly acknowledgement.
If you know your product and can answer questions, and you're friendly and approachable, you'll be fine. (And ditto what PurpleMolly said about being familiar with the ingredients -- I had someone ask me once what every ingredient on my ingredients list was used for, and I was so glad that I had read a couple of books on making soap from scratch even though I am an M&P-er.)
Some don't-forgets: change (lots of small bills), hand sanitizer gel, business cards and promotional materials, bags for purchases, camera, mini cooler bag with a couple of cold drinks and snacks, and a big ol' smile!
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I feel much better about it now, it's nice to know that it's not only just me! I agree that it's off putting as a customer to have someone really pushing for sales - I like to browse when I'm in a shop or a craft fair, so I hate it when there's someone breathing down my neck trying to make a sale! 
Makes me just want to leave. It's also off putting when you're ignored as a customer, especially when you want to ask some questions, so I guess it's about finding that middle ground.
) dawned on me that I knew that name from the list of followers on my own blog! Forgive me, I can be a little slow sometimes. I just didn't make the connection. I guess I need to pay more attention to the signature lines around here. Like YummyMummy pointed out, we all seem to have different names at different websites! So thanks for following my blog, too! I put you on my blogroll. 
