PJ you're not a failure or crap. You are very, very stressed though which is exacerbating the problem. You'll be like a coiled spring at bedtime which your clever little girl will pick up on.
Can I also point out that developmentally while a child is learning to walk and for a few weeks afterwards, their sleep is knackered if you'll pardon the pun. Every book I read, every 'baby development' email I get says it. Their brain is busy developing their physical coordination and sleep (which is developmental I promise you) becomes a secondary concern. DD's never been a bad sleeper but for a few weeks she struggled and it was while she was learning to and practicing walking. Just remember that there are other factors making it twice as difficult right now.
You're so wound up that you're not in the right place for settling her, she's taking her cues from you. This may be partly why you're so upset by your Mum's comments too as you're on a short fuse atm. I think they're just Mum comments really (irritating and frustrating but born of a complicated mother/daughter relationship- she'd be mortified if she knew how upset you were, I promise you).
We did this at the weekend. It was a good thing for Mathilda to watch. It shows that Mummy can be nervous but overcome things. This is a good thing to teach your child. When she does something new like riding on Daddy's bike, she can see the anxiety in your face. If you clap and show her it's all good fun (and mean it), she'll learn a valuable lesson. It's different and new but it's a good thing. She can then transfer this knowledge to being left to sleep alone. I'm not criticising you, I promise I'm not. I've learnt the hard way that when I'm anxious and unhappy, Mathilda is the same. Are you still going to this group of yours? How are things with dh?
Lups, read as far as your news. Congratulations. I can understand your terror but if the GP is positive then you can afford to relax a little. The transition from 1 to 2 is so much harder than 2 to 3. It's going to be fabulous.