Woo! Slow down...
First things first. The theremin is a weird beast. So many variables to consider. What I think will help is
1. Stance. Your whole body affects the theremin, not just your hands. Find a comfortable position that keeps you steady. Martial art positions are good - Peter Pringle favours a tai-chi-esque posture - see some of his videos - http://youtube.com/copperleaves, Barbara Buchholz has a karate stance (feet below shoulders, pointing forwards, knees locked, lean forward a little) - which works for you is going to depend on your centre of gravity.
2. A grasp of how the playing fields work. Here's a description I came up with a while ago...
The fields are not static, they change as you move; both your hands and the rest of your body. Consider a jug mostly full of water. This corresponds to, say, the pitch field (the volume field is the same.) The top of the water corresponds to the lowest note, the bottom of the jug to the highest note. Notes are spaced relative to these two points. So a particular note is, say, two thirds of the way down the water. To play that note requires you to reach into the jug, which causes the water level to rise, so the note is always two thirds of the way down, but where that is exactly depends on the mass of your arm - a larger volume (corresponding to an object that can accept a lot of charge) causes the water to rise more, spreading the notes out, and a smaller volume alters the water level less, moving the notes less. So, for example, very slow, controlled, minute changes in pitch are best made by extending one or two fingers only, after moving the body closer to the rod. The field around the pitch rod is roughly cylindrical around the rod, with a hemispherical dome over the top like a glass dome clock, and with the notes arranged like the layers of an onion, or a Russian doll, the higher notes being closer to the rod.
In a little more detail, the field pinches in towards the top and bottom of the rod, so it is usual to keep the pitch hand mostly at a height about half way up the pitch rod. In an idealized theremin the notes would all be evenly spaced within the field, like the notes on a piano keyboard – this is called linearity. In practice there is always some deviation from linearity, with the notes getting closer together the higher in pitch they are, like a stringed instrument such as a violin or guitar.
Additionally the notes get closer together around the very lowest notes. This is because the audio oscillator of the theremin derives its tone from the difference between two radio frequency oscillators, one which generates a constant frequency, and one which is varied by the proximity of the pitch hand to the pitch rod. As the frequencies of the two RF oscillators become closer the audio frequency gets lower and the two oscillators interact and pull towards the same frequency (which ultimately results in silence – this part of the pitch field is called the zero beat zone.)
The field around the volume loop is likewise composed of concentric layers, with the loudest sounds being furthest from the loop. This time the layers are oval, like a rugby football planted point up in the volume loop. The key feature to note is that the layers are more widely spaced above the volume loop, allowing more subtle control of volume, and more closely spaced to the side of the loop, allowing more rapid changes in volume.
3. Hand to Ear coordination. Spend time exploring the pitch field in particular, just moving your hand and arm within the field and listening, not worrying about the next stage - hitting specific notes - just acclimatising yourself. Think of it like the very first stage of learning to ride a bicycle - the first thing is to learn how not to wobble - you can't *think* fast enough to correct it, it needs to be autonomic...
