Most of us divide our games into two groups - games that we expect to win and games we really want to win. We tend to spend a lot more time on the latter of these two, and I personally think that this is an important observation to make when you are facing an opponent of much higher ranking than yourself. Here are some observations on the subject and an exemplary game that I played recently against a much higher ranked opponent.
When people face someone who is perhaps 2-400 rating points below them, they often tend to play safely and a bit passively, knowing that somewhere during the game a tactical position will emerge that will allow them to win the necessary material. Many don't like to force the game onto a much lower rated opponent because it increases the margin for error (and an error is probably the only thing that can cause a loss from against a much lower ranked opponent) and it takes more time away from more important game analysis. My advice is then: use this to your advantage, and I will try and demonstrate how I did this against an opponent rated around 350 points higher than me (when the game started at least).
Generally, people of a rating that much higher than myself tend to be tactically stronger than me, so my plan was to avoid an open, tactically complex position. I wanted to close things off and play a very positional game, hoping he would remain slightly passive while I slowly built up an advantage. I was ready with the french defense on e4, but he played d4 instead. From studying his games, I knew that my opponent was tactically superior to me, but he did not seem to be positionally as strong, so I wanted to use this knowledge. I stuck to my plan and here is how it went.
Had I been a 2000 ranked player or above, my opponent would almost certainly have punished me for my opening errors, but here he is satisfied with the game developing slowly, waiting for his chance to get me into a tactical position, where he can outplay me. Such a position never arises - it remains a positional game and white is punished for his passivity during the start (and much of the middle) of the game.
So, my advice is: try to figure out where your much higher ranked opponent is superior to you. Watch some of his latest games. If he is a superior positional player, try and avoid closed positions and if he is a superior tactical player, stay away from complex tactical positions. Make a clear plan as to how you want the game to proceed and be very careful with each move. You are likely to get a bit of rope to hang yourself with, so use it to tie him up instead. There are good chances the he may not have a very clear plan for your game and may just be waiting for your errors - so have the game on your terms and hope that it is enough.
