I would recommend using the classic watch and the classic revolver. I swear my skill has decreased since I started using C&D and the Ambassador. If I may do something similar to what patronofspys did:
1. Use classic spy weapons
2. Don't disguise as a scout, spy, or medic to start out with (they take a little more... finesse to be competent with)
3. Know your map, in particular, supply locations.
4. Avoid unnecesary movement while cloaked. On many CP maps, I can make it to the middle point before anybody else on my team (excluding scouts) because I walk in straight lines.
5. This one goes for any class: listen.
6. If you realize that you're not going to make a backstab, change your direction. It can throw off some enemies' suspicions.
7. When trying to get out of a tough situation by means of running, turn around and pop a few revolver shots. Some enemies back off after getting hit in the face with two shots.
8. If you decide to cloak after being spotted, don't walk in a predictable pattern.
9. Don't get yourself into precarious situations without a plan of how to get out.
10. Savor every backstab.
Oh, and spontaneous combustion happens to even the best of spies (myself, Zaw, Dingo, and many others), so don't let pyros get you down.