I work with a man who I find extremely attractive.  Whenever he sees me he gives me a huge smile - his whole face lights up and he keeps smiling for sometime after as he walks or looks away.  He is very shy and sometimes I get the feeling he is looking at me but very hard to catch him in the act.  We had a work social outing not long ago and while I was talking to his friends most of the time he seemed to stand apart and just observe.  When he did talk to me he struck up some silly conversation about undies.  He asked me if women check out if men are wearing undies or not because men check women out.  This seemed sudden and out of the blue. 

Like he is trying to put a more sexual side to him in your mind.

There is another man who is interested in me but I have no interest in him and whenever this other man is around me or talks to me I can see this guy getting disappointed.  For example not long ago I was sitting in Subway having lunch with the other man when the one that I like walked in. 

Having lunch with a guy, means a date to most men. 

Normally he would give me one of his huge smiles but when he saw me with that guy he gave me a very average smile. 

Yes, he obviously didn't like you chatting to this guy but this would show on a friend too, because friends get jealous when someone is getting too friendly with their friend. 

Also at the social outing, when it was just me and his friend he suddenly seemed very agitated with me and started asking questions about this other man such as why he can't leave me alone, am I giving him the impression that I like him, have I told him I don't like him in that way etc..

It's distrust because in a man's opinion, women like to play games.  He will think you are playing this other guy off against him.  As a result he will be unsure about whether you fancy him or whether you are using him to get this other guy jealous.  So basically it is insecurity that you are chatting up another guy, when he wants to be the only one you are chatting up.

Does it sound like this man I am attracted to is interested in me going by his smiles and strange behaviour or am I trying too hard to find something to convince myself he likes me?

By what you have said, I think he is making it obvious that he is jealous of other men around you and for that reason I would say there is a very good chance that he does fancy you.