Don't get dispirited if they cite loads as being wrong with your riding. Even above average riders, even quite experienced ones will have quite an extensive inventory of things they do wrong (or if not 'wrong' at least not 'the IAM way'

). I know it's hard with a pan in your mirrors, but try to forget they're there. Being watched made me ride badly, I felt like I was on a test again and concentrating far too much on them rather than my riding. Get the IAM book and give it a thorough read, so at least you know what you're aiming for. I've found the best way I learn new things riding is to go for a ride, focusing on one new thing you've learnt and only once you've gotten so you do that all the time without thinking about it, try adding another thing. Good observers will teach in this manner and not overload you with too much new stuff at once. They usually focus on the easiest to change or most dangerous (if you're doing something particularly risky) aspect of your riding first. Towards the end of your training they'll be pulling you up on seemingly arbitary things that make 0.0001% difference in the real world, perhaps that you don't even agree with/adopt into your riding after you complete your test and teaching you advanced ways of making progress (overtaking when view is obscurred, etc.). The biggest changes in your riding and consequently best improvements safety-wise come early on.
As an aside, try and stick with the same observer if possible (provided you get on with them and they aren't talking ***te), I found having several very confusing as I'd be picked up for doing something that I'd only started doing at the request of the previous observer! If you don't get on with the observer you're allocated, speak to the other observers in the group. If you think they're rubbish, the group will generally know/recognise this and not put new riders with them, although if busy (eg on an intense course) they might not have any option.
Relax and try to enjoy it.