GUILT

TWO TYPES OF GUILT

One can distinguish two types of guilt: the first one is simply the fact that one is guilty of doing something, and the second type refers to seeing or projecting one's mistakes, while not knowing what to do about them or refusing to correct them. It is the second type that leads to a lot of mental suffering in Western culture.
This second type of guilt is a negative, paralysing emotion, based on non-acceptance of oneself or the situation one is in, and it leads to depression and frustration rather than change or improvement.
Guilt is usually a negative focus upon oneself: "I am an evil person. I can't bear myself. I am unworthy." While this response may appear in a religious guise, it can also turn into a form of self-deprecating laziness. This can even lead to self-hatred, and certainly contributes to lack of self-confidence. Instead of recognising that ones actions are incorrect, one gets the feeling as if one is unworthy, as if "I" is intrinsically bad. This sense of 'I am bad' can have devastating psychological effects and is very different from the seemingly similar 'I have done something bad'.
In Buddhism such type of guilt is categorised as a disturbing attitude: one doesn't see the situation clearly and may well be a tricky form of self-centredness.

A personal opinion: within the Western mind, I believe that guilt has such a prominent place because of the Judeo/Christian background of our culture. The concept of being born onto the earth with an "original sin" - for which we personally are not even responsible - puts a feeling of guilt in our minds (I am bad, even without doing anything wrong). Furthermore, the presentations in several Christian traditions can give one the impression that one should feel guilty and ashamed even for simply having fun. I believe that this type of guilt is a learned, socially imposed emotion; for example, Tibetans do not even have a word for it! If that is correct, it is not even a basic human emotion, but a culturally  imposed type of mental frustration; which means that we can relatively easy overcome it by un-learning this artificial emotion.
Also, in raising and educating children it can make a world of difference to not condemn a child with 'you are bad', but instead say something like 'you have done something bad' - the first is a an undefined condemnation of a child, the second is a teaching in ethics.

REPENTENCE

Although guilt is not seen as a very positive emotion, repentence is seen as very important factor to improve our ways of thinking and behaving. The positive/transforming aspect of guilt can be that we admit our mistakes, ponder over them and motivate ourselves to not repeat negative actions - repentence.

Below message from the Zeph forum explains this quite well I think.

For all the evil deeds I have done in the past,
Created by my body, speech and mind,
From beginningless greed, hatred and delusion,
I now know shame and repent them all.
Traditional Repentance Verse from "The Practices & Vows of Samantabadra Bodhisattva" (Avatamsaka Sutra, Chapter 40)

"The above is perhaps the simplest but most widely practised verse of repentance. The practice of Buddhist repentance is not so much the asking for divine forgiveness. It is the clear recognition of our unskilful actions done intentionally or unmindfully through our body, speech and mind, which are the results of our lack of compassion and wisdom, originating from our attachment, aversion and delusion. After recognising our misgivings, we make resolutions to be as mindful as we can, so as to never repeat them under any circumstances. In this sense, repentance is about forgiving oneself through expressing regret and turning over a new leaf, absolving oneself of unhealthy guilt while renewing determination to further avoid evil, do good and purify the mind with greater diligence.

Traditionally, the practice of repentance is done through chanting relevant sutra verses and bowing before a Buddha image, which represents the presence of the Buddha bearing witness to our sincerity. However, if one has done wrong to someone who is contactable, one should apologise to him or her personally, or the practice of repentance before the Buddha would be rendered a hollow practice lacking in sincerity. Even if the other party is unlikely to forgive us, we should do our part in seeking forgiveness - this is also the practice of humility. Actual remedial action of making up for any physical or psychological damage caused to others is also important - or repentance would literally be merely saying "sorry".

Repentance should ideally be practised at the end of each day, as we try to recall best we can, any misgivings we have done in the day. For repentance to be more effective, misdeeds should be recalled as specifically as possible, instead of vaguely generalising. Doing this practice daily reduces our repetitive mistakes as it increases our mindfulness the next day. Repentance should also be practised immediately in the moment, without procrastination, when we realise we have just made a mistake. If one's pride is too strong, one should still make a point to repent later, as soon as possible.

The stronger our sincerity is, the more powerful our repentance becomes. While repentance does not erases our negative karma, it can dissolve its future effects, much like the addition of abundant pure water onto salt, which dissolves the otherwise unbearable saltiness we have to taste. Interestingly, repentance practised well can become meritorious, as it prevents the creation of fresh negative karma which can lead to future suffering, while offering peace of mind to better learn, practise and share the Dharma, thus clearing much of the path to the attainment of Enlightenment."
Shen Shi'an

"If guilt means extending worry about what you have done, then it does not help. Buddhism stresses not guilt but contrition followed by developing an intention of restraint in the future. Simply put, you decide that you have done something wrong and then promise not to do it again. Sometimes, some tangible restituition is possible; for example, you can pay for damages or return stolen property. But often, the action is over and done with. For instance, if you buy something that does not work, you can return it to the store. But, if you misuse time itself, no matter how much you may regret doing so, you cannot return it.
All that is left is an intelligent decision to face what has been done and make a commitment to break the cycle. In meditation, contemplate: "This action was motivated by desire (or hatred) and ignorance; it was wrong, and I do not want to do it again in the future. May I not do it again in the future! I will make sure not to do it again in the future." It's a great relief to feel: "Ten years ago I quarreled with so-and-so. It seemed to be the only thing I could do at the time, but with what I know now, I would not do the same today. I will try never to do that again!"
From A Truthful Heart: Buddhist Practices for Connecting with Others by Jeffrey Hopkins

By three things the wise person may be known. What three? He sees a shortcoming as it is. When he sees it, he tries to correct it. And when another acknowledges a shortcoming, the wise one forgives it as he should.
The Buddha: Anguttara Nikaya I - 103

"When we meditate, things from the past come up, and we have to work with them. We may remember times when we treated others horribly--hurting their feelings, deceiving them, repaying their kindness with spite, manipulating them, cheating them. While regret for these actions is appropriate and necessary to purify these karmas, we often fall into guilt and shame instead. Guilt and shame are obstacles to overcome on the path, because they keep us trapped in our self-centered melodrama entitled "How Bad I Am." Regret, on the other hand, realizes that we erred, leads us to purify, and motivates us to refrain from acting like that in the future.
How do we counteract guilt and shame? One way is to recognize that the person who did that action no longer exists. You are different now. Is the person who did that action five years ago the same person you are now? If she were exactly the same person, you would still be doing the same action. The present "you" exists in a continuum from that person, but is not exactly the same as her. Look back at the person you were with compassion. You can understand the suffering and confusion she was experiencing that made her act in that way."
From Cultivating a Compassionate Heart: The Yoga Method of Chenrezig by Bhikshuni Thubten Chodron

'To do our best' means that at all times in our everyday life we should probe our minds so that we don't feel guilty about our mistakes, even though others don't know about them. If we do that, we are truly doing our best.
His Holiness the Dalai Lama

ANTIDOTE 1 - Reflect on responsibility. Often it may prove it is/was not my responsibility or fault! Blaming oneself for everything negative that happens is a form of ignorance and self-centredness. Obviously, if I am careless and intended to cause problems, then I should take my responsibility and see to it that I will not repeat this regrettable action. Instead, maybe I can do something to make up for it.

ANTIDOTE 2 - Reflect on motivation. An act done with a positive intention, especially without any self-interest is not negative, although other people may be harmed by it. The suffering experience of others is strictly spoken the result of their own actions (karma), and apparently I just happened to be part of the circumstances that could ripen their negative karma. However, we may have made some mistakes like wrong communication or insufficient attention or so. If this is the case, it should just be a reason to change our habits by improving our communication or mindfulness.

ANTIDOTE 3 - Changing or accepting. If you can change yourself or the situation, change it! If you can't change yourself or the situation for a good reason, accept it! Not acting where we can and could act can lead to frustration and guilt in the long run; just like acting where we actually cannot do anything.

ANTIDOTE 4 - Analyse the use of feeling guilty. For example: Imagine three people coming into a restaurant and ordering the same meal. One of them begins eating first, several minutes later the second begins his meal, and finally the third begins his. After the third person has eaten just a few bites, the first person clutches at his abdomen, crying out in pain; and the second begins to show signs of discomfort.
How does the third person react? Not with guilt, or self-condemnation. Instead, he naturally regrets he has eaten the same food as his two companions, but rather than dwelling on the past, he moves rapidly to counter the effects of the poisonous food he has eaten. His remorse is constructive. It is based in the present; it is intelligently concerned with the future effects of his recent actions; and it leads to remedying the damage already done and to caution about repeating such an act.

ANTIDOTE 5 - Forgiving. Making mistakes is an inherent human quality: if you don't make mistakes you are definitely not a normal human being anymore. If we are unable to forgive ourselves, we will certainly not be able to properly forgive others.

ANTIDOTE 6 - Reality check with others. If you can overcome your feelings of guilt and shame somewhat, try to discuss these matters with others and see if your reasons for feeling guilty are really valid.

ANTIDOTE 7 - Emptiness. As ultimate cure for all delusions, realising emptiness will also rid our mind of guilt, as it destroys all negative emotions at the root. See the page on Wisdom.

Summarising:
Try to transform: the lack of self-confidence, ignorance and mental "paralysis"
with: repentence, purification, forgiving oneself, love and compassion for oneself, equanimity, openness, reality check with others and wisdom
into: positive action, fearlessness and self-confidence

Links
For more meditations, see List of Sample Meditations.

Just for fun

If I had my life to live over again, I'd be a plumber.
Albert Einstein

If you wind up with a boring, miserable life because you listened to your mom, your dad, your teacher, your priest or some guy on TV telling you what to do, then YOU DESERVE IT.
Frank Zappa

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