How do I best prepare for a job interview?

Come prepared to describe one of your most significant accomplishments, how you overcame/handled a challenge or difficulty and have at least three questions you'd like to ask. Treat the interview as a conversation, not an interrogation. Listen actively and not like you're just waiting for the other person to stop talking so you can talk. If you treat it like a conversation, you can be more natural. Some silence is OK, say let me think me about that for a moment before responding. Practice for "tell me about yourself" question, keep it focused on your profession and don't include personal information.

Just remember: you can do his job. In fact, you already do this job, every day. This isn't a "can I get this job" interview; this is a "let's find out if I like these people, because this larger company can afford to pay me properly for the work I'm already doing" interview.

Find a relaxation or deep breathing exercise that works for you, so you can keep yourself calm and centered while you prepare, and while you're in the interview. Research the crap out of the company, so you can come loaded with lots of questions. If it helps your serenity, pretend you've already been offered the job, and you're actually going to interview them to see if you want to work there.

I am like you and get quite nervous. In terms of getting in the zone, I've found the best thing to do is recreate the interview as closely as possible beforehand a few times. Get a trusted friend (probably one who's done some interviews before) to be the Interviewer, and playact a likely scenario. Ask them to critique you after. The more you can say the stuff out loud, the more it will start to flow naturally in an interview. You'll also notice some of your weak points and can polish those. Another good piece of advice I got is remember your bullet points. What the reasons you would be a good fit and your key skills, what is your interest in the company, what are the things you would implement if you had the job. Once you have those main things, you can arrange them to fit a lot of different questions. Agree with the other recs on knowing everything you can about the company and your interviewers, and having specific questions that show you do your homework. Other than that, focus on positive rapport with the interviewer(s). That is another big thing that can sometimes be missed -- they're looking at indicators of your personality as well and how you might fit in with their team that way. Best of luck!

As you head to the interview, recite like a mantra: "I don't need your job. What's more, I'm not sure I want to work for your company." This worked like a charm for me when I was marketing myself as a freelancer.

If it's been a while since you've last interviewed, you might want to have someone videotape you in a mock interview and play it back for you. Seconding LinkedIn to get to know your interviewer. Also helps to make them less intimidating, IMHO, if you know what they look like before you show up. Almost feels as if you've met them before.

Before interviews I always read all the interview posts on http://www.askamanager.org/ I also research the hell out of the company and my interviewers.

You could try what this TED http://www.ted.com/talks/amy_cuddy_your_body_language_shapes_who_you_are.html suggests and power pose before you go in. I've tried it and at the very least it makes me smile.

Sounds like you have all the normal interview advice under your belt, so here are my nontraditional tips: Have you worked with incompetent people before? Of course you have. Think of 3 of them now. Some of them might even be in jobs above yours. Isn't that annoying? News flash: they interviewed and got those jobs. So it can't be that hard. You have an advantage over those 3 people. You are competent. Hooray! Think about what must have convinced hiring managers to take those people on. Was it confidence? Are they good at puffing up their achievements? Are they good at mimicking and making other people feel comfortable with them? Use their techniques. With those techniques backed up by your actual skill and ability to do the job for real, you are unstoppable. Other confidence tips: Before you get dressed, do 3 push-ups. You are a strong mofo. Also, wear a matching underwear set. You have your shit together, yes you do.