Practice if you're worried about embarrassing yourself on the dance floor. Put some old comfortable clothes on. If you're more comfortable dancing barefoot, then eliminate the shoes.
Have a cocktail; this is always a great way to loosen up the body and rid you of any inhibitions.
Turn the music up and practice some of the more basic steps in front of a full-length mirror. Start by moving your feet and hips, really feeling the music. When you feel comfortable moving your feet, put your arms in motion. You will know immediately what looks good and what doesn't.
Focus on the music, feel the beat and move with the music. It helps to close your eyes and just let go. Keep in mind that there is no standard way to dance.
Take a dance class if you're still not comfortable enough to get out there and have a good time on the dance floor.
Get lost in the crowd out on the dance floor, have fun and remember to smile.