Stress is something integral to the software industry and the ability to handle it is a key differentiator. I have seen the best of guys crack up. It’s never the stress itself that kills but the way one handles it. Here’s the Art of handling stress.

Learn to say no: "Try to please everybody and you end up pleasing nobody" the saying goes. It can't be truer. Be it with subordinates or superiors, push back legitimately with datapoints to back up your case. A developer overloaded with work could come up with estimates for her tasks and share the same with her manager, therby rescheduling the excess work. Pushing back and delivering is usually better than promising and failing. Here are six great ways to say no.
Leave multitasking to your Pentium: Often you find job descriptions that read: " Should have the ability to multitask". Hopefully recruiters are confusing the ability to handle tasks requiring different skill sets for true multi tasking! Multi tasking is a good way of introducing errors into all the tasks that are being multi tasked. Single task focus allows one to get more work done with fewer errors.
PS: Even CPU's that do too much multi tasking are inefficient due to the context switching overhead.
Visualize stressful activities before you execute: Visualize yourself successfully performing a stressful activity before you actually do it. Say you find salary negotiations stressful, visualize yourself speaking to the potential recruiter. Mentaly play out the scenarios in detail and see yourself walking off with your dream pay package.
Cut out the harmful imagination: During stressful times, the demons in our mind are often more dangerous that the real world problems confronting us. Our own imagination plays out the worse, creating self induced stress.
Be on top of your game: Often, incompetence is the root cause of stress at work. Actively take up certifications and courses that keep you on the bleeding edge of technology and business. Ensure the effort you put in links up with the next milestone you wish to reach in your career. A team lead who desires to be a manager could investing time in running through free training programs at the MS website. Proactive skill development helps alleviate the anxiety and the stress that sometimes comes with career growth.
Delegate effectively: Effective delegation helps empower people, allows one to focus on higher value added activities and distributes workload. The initial overhead involved in kickstarting the delegation is more than made up for by the rewards that accrue later. Here are some tips on effective delegation from about.com.
Hire the right people under you : A successful team requires a potpourri of skills: Technical, managerial and domain. It is impossible for the top guy to have everything. Keep a core skill with you, know enough about the others and ensure people under you complement your core skill by specializing in areas that are outside your core skill.
Crap has hit the fan ? Remember the old Persian saying "Even this will pass".
Exercise daily no matter what: Twenty push ups will do the trick. No fancy equipment, no personal trainers and no five thousand rupees shoes from Nike. Any sort of vigorous physical exercise releases endorphins, natures own “fix”. Not convinced ? Ok, maybe this BBC article can convince you.
Pray often: Stress comes from two broad sources: a). Things we can control b). Things we cannot. Prayer is magical when it comes to dealing with the unknown. The power of faith is priceless when you really need it. You can get prayers from your own faith here.
Take adversities as opportunities for improvement:
"That which does not kill you makes you stronger" - Friedrich Nietzsche
Every difficulty potentially teaches us a new skill. They make us stronger, better and tougher.Here's what Charles Carpenter says about handling adversities. Also check out the fable about the coffee beans.
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