You just need to do it, and keep doing it, and eventually you'l become desensitized and won't really care if anyone actually does say anything, however don't go invading people space by getting right up close (without permission anyway) otherwise that could end up nasty.
The trick is confidence, you must display
absolute confidence, behave like you would if your trying to court a girl, if you walk around nervous and too scared to make eye contact, you'l just look creepy and of low social value and she'l blow you out, the same goes for people on the street.
You might want to check out the below guy's work, as he actually did a recent project where he went up to 100 strangers on the street and with permission took their portrait.
"Too many to tell - but what is consistant is everyone is curious what the project is for. But what shocked me (today was my first day shooting this projects) is how nice people are in general.
I just tell them its an artistic project I'm doing, trying to get random strangers in the street to take a few shots of and 90% of them are like "okay, sure!"
I was real nervous for when I started but it became a lot of fun!"
http://www.flickr.com/photos/45488776@N03/sets/72157625832773452/with/5358399429/
http://photography-on-the.net/forum/showthread.php?t=986252&highlight=Strangers+Project