There are two separate issues: morale management and being calibrated about your own abilities.

I think the best way to be well-calibrated is to approximate pagerank -- to get a sense of your competence, don't ask yourself, average the extracted opinion of others that are considered competent and have no incentives to mislead you (this last bit is tricky, also the extracting process may have to be slightly indirect).

Morale is hard, and person specific. My experience is that in long term projects/goals, morale becomes a serious problem long before the situation actually becomes bad. I think having "wolverine morale" ("You know what Mr. Grizzly? You look like a wuss, I can totally take you!") is a huge chunk of success, bigger than raw ability.