This is my first and a random post that I am using to share my limited experience of attending some interviews and also being at the other as an interviewer.
It's perfectly reasonable and fine being nervous during an interview. The environment is strange, people are new and everything may be out of your comfort zone. While it is true that 'First impression is best blah blah' but if you can get over your nervousness during the course of the interview, many do ignore and understand your initial nervousness.
Tip: If you search on the internet, you will find a dozen suggestions for a dime, but the simplest thing that you can do to limit your nervousness is to get to the interview venue ahead of time. This gives time to relax, get comfortable with the environment and get in your zone before the interview. A habit that I have developed from past few years is to go to the interview venue before a day so that I can figure out logistics, etc. This helps me in planning my travel better on the day of the interview and I am not stressed to reach the interview on time.
You may not have followed the tip to reach early, but it's usually not a great idea practically to start your interview as soon as you arrive. You are already late and a couple of more minutes is not going to make things much worse. Excuse yourself and have a glass of interview. This gives you time and space to calm yourself down.
Often times I have seen people not listening to the question properly and sometimes even scared while asking someone to repeat the question. There is no harm in asking someone to repeat their question. Consider the flip side, you do not understand the question, assume something and answer something that makes no sense to the actual question being asked :)
This again is my personal opinion but if you do not know something or have not got chance to work on something while being asked in interview, you can simply state the same and explain whatever you know. This atleast earns honestly and integrity points in my book plus remember 'Nobody can know everything'. There is always scope to learn and improve.