I think it helps to remember it's only a game. A lot of the game is pattern recognition-- especially tactical patterns. If you get hit with a tactic you didn't catch you can beat yourself up over it, or you can eventually begin recognizing them. Losing will help you see what you miss, so while you get tense during a blitz game or feel the rush of competition, don't forget to enjoy it.
I think there is something analogous to "tempo" in music at work here. I found that I get quicker at recognizing patterns and figuruing out what's going on in a position (to the limited extent that I do figure out such things) the more I play and study tactics and stuff. With all the areas of study in the game, which ever one you put your effort into, it will pay off in blitz or standard time controls. I like "on-line" chess in that it gives time to try to study a position in depth, but the most benefit to my game comes from tactics and end game study. Blitz-- for me anyway-- I use to show me my blind spots. I've got quite a lot of those. People might not take blitz "seriously" but if someone can play at a high level very quickly that's got to say something about their ability.
I'm a slow thinker, and generally I am more at home playing standard time controls and turn-based chess. However, I wonder how my weakness at blitz will affect my overall strength. Some say that blitz isn't serious chess and shouldn't be taken too seriously while others maintain that it is a good way to train your time management and to hone your skills. Any suggestions on how a slow minder like me should treat blitz? Should I play some more blitz to enhance my thought process?
Oh and by the way a lot of people consider blitz as a way to relax, but I tend to get very tense during any blitz game, I wonder if its just my attitude, you know, wanting the win too badly.