Why do i care what people think?

Today i was happily walking with my friend and i saw this guy i know, and he didnt regonize me before (we would talk on msn ocassionaly) and some chick next to him said my name and i looked a little and then turned back (Because i was talking & walking) and then They laugh and this kid i know (hes 2years older than me) goes "Thats her, ewwww" and laughs, and since then ive felt down and like im not good enough, and i feel like hiding my face and dieting and all this, why though? it was just some guy who i hardley talk to, My friends say im really pretty and stuff and i had confidents but now i feel to ashamed and feel like i should hide my face, and i know inside that it shouldnt matter what he thinks, but i do worry.\: what should i do?