I find your final question interesting. The best way to appear confident in your own skin is to actually BE confident in your own skin. It is clear that you don't, so you are not going to appear that way until you embrace who you are. Right now. Not who you hope to be someday, maybe. Not who you thought you would be. Not skinnier, richer, more 'worldly'. You.
Your weight/employment status/financial situation/etc. do not make you who you are. You are still the same person he liked and befriended all those years ago. You are who you are, and obvioulsy he thinks you are pretty awesome if he wants to meet up again and have his family meet your and yours.
I think it is interesting that Jodi D. says...'if this person makes you feel this way'. I'm not so sure about that. I think you just feel less than cofident in yourself right now, and the thought of meeting up with him has brought this insecurity to the surface, not that 'he' made you feel that way.
Your post makes assumptions about him and his wife that may be unfair to them. Just because she is skinny, doesn't mean she is a nasty person that judges others based on their size, or gloats that she is skinnier than they. (Are you unfairly judging her based on her size?) Just because he has financial/career success doesn't mean that he looks down on those that don't. He may admire the fact that you chose to stay at home for your kids, and empathize with your rough time finding a job now in this lousy economy. You seem to be assuming the worst of your friend.
This is a decision you have to make, but please don't let yourself be your own worst enemy. You say you want to see him again and meet his family, so do it. Go, be you. That is more than enough!