I get stage fright but I get through it. It helps if either you or the crowd are drunk.
I did a couple of spelling bees (winning them all except the nationals), one open mic as half of a guitar duo (couple of white russians helped here, and even though we sucked the singer was funny and the crowd loved us), and more recently a completely sober karaoke performance of Biggie Small's "Hypnotize" for a small audience, which I nailed.
Stage fright is worth punching through. You know you're a good guitarist and so do your friends, so do your thing FOR YOURSELF in front of a bunch of random fools who don't matter. If they like it, great. If not, who cares? They're just a bunch of random fools.