I've been reading the Moral Animal and it had a really fascinating observation about self-deception.
It turns out that self-deception is likely to be a natural evolutionary advantage, developed as our perception about our outside world improved. As you would expect, humans with better sensory perception had an advantage over rivals--they could sense danger, forage better for food, size up opponents, etc.
Our increased sensory perception also allowed us to read body language, facial expression--look past a bad poker face, essentially.
The self-deception comes in when it becomes and advantage not to give away a lie with your body language. And, as we all know from George Costanza, "It's not a lie if you believe it." To an extent, deceiving yourself first is an effective way to decieve others, and, for better or worse, the ability to deceive others is an evolutionary advantage. Perfect example: standing up to a bully twice your size. Perfectly translated observation to cognition to observation should tell you that you're going to get your ass handed to you. However, if you can delude yourself enough that you actually have what it takes to win, you might get the other guy to think twice, versus smelling blood.
Of course, in this case, the combination of speed and self delusion turns out to be the best advantage.
I wonder if self delusion isn't a natural advantage of entrepreneurs? You have to admit, attempting to knock off Google or Microsoft or whoever must come with some kind of evolutionary kool aid consumption.