How do you react in such situations

I have been in some weird situations -

How do you react when you bump into an acquaintance somewhere... .. that person is an acquaintance.. not a friend.. didnt speak too much to that person during the time we studied together... our wavelength never matched you could say... we moved around different circles... so while we staying in the same campus we hardly talked...

This conversation went something like this :

Oh hi... what a surprise!! Fancy meeting you here
So how are you?
Where are you? Which company?
Where do you stay?
What is XYZ person doing?
And what about this person?
And what about the other person?
And the other.... well, fancy meeting you here... did you hear about this person.. And so on and so forth.. before leaving i did take her number though i was hesitant to make the first move.. well, the call is never ever going to happen.. but i was like.. i should at least be courteous... I guess!!! I usually dont know how to handle such situations... as the warmth is an old friend is missing.. and it is not that you are meeting someone new!!! Its quite strange..

And what if you meet someone at the parlour... thank god when i met the person, it was the other person getting things done and not me.. it was awkward even then!!!

The weirdest of it happened at the gym a few days back... i was wearing a sari for the traditional day at work.. was at the locker room... now there is a suana attached the locker room.. and out walks this woman from teh suana.. wearing a towel.. which almost about to come off.. i turned my back to her to give her some privacy... everything was fine till she initiated conversation with me... your sari is very pretty.. is it the kerala sari... and all throughout i was mumbling.. looking down.. i didnt know where to look!!!!!

Another is walking into a discussion.. and suddenly all conversation stops.. should you leave or sit.. or apologise for the intrusion.. even if you do apologise.. everyone usually hastens to assure you that you didnt intrude.. and if anything, that just makes you even more sure of your intrusion!!!!

Of course, i have always have had foot in the mouth disease... started as early as school.. once i remember being in a group of students (who i didnt know very well really)... and we were talking about names... for one of the names i wasnt satisfied talking about about how much i didnt like the name.... i had to tell them precisely why.. and i ended up saying it sounds like a cabaret dancers name (at that time hindi movies always had vamps with such names)... and a girl came forward and told me.. hey, thats my mom's name.. and she started crying...and i was left mumbling.. you know i didnt really mean that!!!

I find these situations extremely awkward and embarrasing.. either i laugh raucously to show i am unaffected.. or i look around pretending i didnt hear the question!!!!! Hummmphhh... maybe i need to attend a finishing school :)