Do you sing along? Or just sit there and stare at them?
I have found smiling the best option, but I feel really awkward sitting there grinning at everybody like a loser. ;)
When the lights are out it's easiest because you don't really have to look at anybody...well, you do but you can just look at the cake can't you....but no you should look at people...
ARGH I am driving myself insane with this!!
And your own experiences would be interesting to hear so I know I am not the only one humiliating myself.