after d6, play d4 or Bc4.
http://en.wikipedia.org/wiki/Philidor_Defence
"3. h3 Preventing the bishop pinning my knight" This is why your openings suffer. You are afraid and reacting to things your opponent hasn't even done instead of developing your pieces.
You didn't lose this game because of the opening. There were problems in the opening, sure, but you lost because you castled queenside right into the best place on the board for him to attack, and because you traded away developed pieces for no gain. But mostly the first one. You were cramped, to be sure, but you needed to be patient and try to untangle things.
Look at the board before your 10th move. He's got a massive space advantage on the queenside, better development, and none of your pieces can easily get to the queenside to defend. The situation dictates that for him, he wants to maintain his control of the center and begin to attack your queenside. The situation for you dictates that you need to fight his control of the center so that you can stabilize the queenside.
By castling long, you are almost committing chess suicide, placing your relatively unguarded king right where the board is begging him to attack.
I'm terrible with openings... as in "TERRRIBBBLLLEEEE", it's only if I can make it to the middle game/end game do I excel.
What moves /should've/ been played to prevent this:
I think my main issue was not realizing what my opponent was planning. I felt like he was going for a mating pattern using his knight, but ended up using his bishop :(