Confidence is kind of MBA 101.
I'm not being trite, just saying - you really need to be convinced you belong at the schools you're applying to, regardless of your profile +/-'s. I'm trying to find time to write a blog post about this on my blog, but generally speaking - confidence is *key* in business and life.
Whatever you need to do to 'courage' yourself instead of feeling discouraged, go do it!!!! (perhaps talk to a few supportive friends, do a few shots... whatever makes you feel that School003 should DEFINITELY take you because YOU ROCK. Then figure out how to say it without ego.)
Absolutely agree. If you don't come from a "feeder" undergrad or firm (i.e. top 20-30 undergrad, top consulting/banking firm), it is very easy to feel queasy or unsure whether you belong at a top B-School. You have to fight this feeling and march forward with confidence. It's the only way you'll make it through and get an admit.
Definitely immerse yourself in the process as well -- attend as many information sessions as you can, visit campuses, talk to current students. The more you do this, the more you'll find that most students at top schools are definitely accomplished and top notch, but human just like you.