Ego is usually associated with thinking one is great at things. This is not really the case. A big ego is often manifested in people who think they "suck," and thus cannot enjoy other people's achievements. The pathetic person in the comment I link to (which I found in turn from a comment yesterday on Clarissa's blog), cannot enjoy guitar playing because he thinks he sucks at playing guitar. He cannot enjoy a movie with a good screenplay because, in his mind, he could have been a great writer himself. If he really wanted to not suck at the guitar he could practice for ten years and get good at it. At 34, he would still be young. He could learn to write if he wanted to, but I suspect his ego gets in the way. If the results are not immediately perfect, he gets frustrated.
So ego is not about thinking you are great, but about assuming you should be able to be great with very little effort. It is the egotist who has a kind of empty self, projecting his insecurities onto other people.