You can make a case for Khalid in Baldur's Gate. He's the easily unnerved Henpecked Husband of Jaheira, whois usually the first to have a morale failure and run in a battle (even though he has some of the highest HP) and can hardly form a sentence without stammering. One of his trademark phrases being "If at first I don't succeed the wife won't let me forget..." , but level him up enough and he makes for a pretty decent tank. And you don't want to have to deal with him while he's Dire Charmed.
If you'd like a demonstration of Khalid not being as big a wimp as he seems, just sent your group into a random inn and start indiscriminantly slaughtering everyone. Watch as Khalid's usual stutter completely vanishes and he actually sounds sure of himself for the first time in game.
Luigi in Super Mario Bros.. He proves to be more effective than Mario on quite a few occasions. He took down the lord of the underworld by himself. And it was certainly a Curb-Stomp Battle.
He's even more like this in Luigis Mansion and its sequel; he's clearly terrified half the time in both games (given the fact that he's fighting ghosts, that's no surprise), but somehow manages to save the day.
If you allocate enough points to his Strength stat, the Chaos Hero from Shin Megami Tensei I can be like this.
He fits this trope whatever you do with him (unless you deliberately allocate his stats stupidly), Statistically Speaking. But he is never strong enough to defeat Ozawa until he Takes A Level In Badass.
The Maw, a game on the Xbox Live Arcade. The title character is a blob who can eat just about anything and keeps getting bigger until it eats the entire planet, but it has a tendency to flee screaming from enemies that posture in a frightening manner.
Almaz, from Disgaea 3: Absence of Justice. He's a normal human fighting demons; he has a right to be scared. Still manages pretty well for himself when it counts.
The Grunts from Halo. They are tiny, weak, and treated like cannon fodder by tyrants who are larger and stronger and far more numerous than the human supersoldiers. On top of that, they breathe methane instead of oxygen; this means they are constantly fighting in poisonous environments and relying on breathers that can be ripped out of their mouths. The methane tanks they are forced to carry on their backs for survival are also extremely prone to explode when shot, thus they are also carrying their own death on their backs. These guys have every reason to be terrified, and yet many of them attempt suicidal attacks of bravery to great effect.
From that same series, the Marines of the UNSC. It has been frequently stated that were it not for John 117, humanity likely would have been already overrun and destroyed. Their enemies are far more advanced in terms of firepower and raw physical strength, as even a single low-ranking Elite can tear through a whole squad on its own. They frequently make comments that make it clear they know how outmatched they are and that in all likelihood, they will die horrible deaths at the end of a plasma rifle. Yet, they do their best to fight effectively against these powerful foes. The only time they are seen to crack up is when facing the monster that is The Flood.
Hahn Mahlay from Phantasy Star IV, a meek young scholar who learns the instant death skills Vol and Savol.
The player character in Penumbra. The "Cowardly" part is represented in-game—if he so much as looks at a monster for too long, he'll panic and give away his position. "Lion" is made more apparent as you play the game and see just how much stuff he goes through while staying sane and ready for action.
Dirk the Daring of Dragon's Lair usually attempts to put on a brave face when battling the disturbing and creepy creatures he has to face when saving Princess Daphne, but it's obvious that he's a freaking nervous wreck the entire time.
Poco from Arc The Lad: a musician who's afraid of his own shadow...and who happens to be one of the strongest fighter of The Verse
In Medieval 2 and Rome Total War generals will often bring up that there is no shame in feeling fear before a battle, but it is letting fear rule you which is cowardly.
"There is no shame in fear. There is only shame in letting fear rule you! Try not to look scared, and you will find bravery in your heart!"
"...any man who faces battle without concern, is a moonstruck fool. To be brave is to go forward anyway, no matter how afeared! That is why I go forward, with so many other brave men."
In Final Fantasy VIII, anytime actual work is proposed, a minor character named Zone immediately crouches by the wall and complains about stomach pains. Later, he goes off and buys emergency train tickets for himself, his leader, and the three main characters, not counting on there being one addition to the party. After a moment, he passes his own ticket to her, then immediately finds a corner to hug his stomach in.
Star Control has the Spathi, who are hilariously scared of just about everything. However, when the "Evil Ones" began multiplying on their homeworld, they went from "industrial revolution" to "space-faring species" in under a century. Their ships are extremely tough and have homing weapons. Basically, if they have nowhere to run, they fight back hard. One character describes them as "a clam, armed with a Howitzer".
Satoshi Mochida of Corpse Partyhates scary stories. But once he finds himself in one, he actually handles himself pretty well.
Daichi in Devil Survivor 2 is always scared of the next demon attack and complains that the others are much more calm than him, but he'll always volunteer to fight and will drive a truck right onto a killer divine being to save his comrades.
Sir Daniel Fortesque, main character of the Medi Evil games. Despite having to be dragged out of bed to lead the initial battle against Zarok, dying from the first arrow fired (this was glossed over by the king of Gallowmere), and some members of the Hall of Heroes not having much faith in him, Dan still gives his all in defeating Zarok once and for all after being raised from the dead and getting a chance to redeem himself. The remake of the first game plays up some of his cowardly tendencies more; in that game, Dan was apparently shot when he was "pretending to tie his bootlaces."
Sparx from The Legend of Spyro fits this trope nicely. He often voices his displeasure with the dangers they must constantly face, but he always sticks with Spyro. When he is a victim of Shoo Out the Clowns at the end of the series, he legitimately fights it, even though he knows he has no chance of surviving.
Garry in Ib. Throughout traveling with Ib in the gallery he freaks out at things that Ib doesn't even bat an eyelash at (falling over in fear when a painting spits at him, or screaming when a vase falls over causing Ib to tell him that his screaming was scarier than the vase falling over was), but when push comes to shove he will do things that need doing, be it fighting off a psycho painting with a knife or walking through a room of poisonous gas. And he will willingly put himself on the line if Ib's in danger, and in some endings even dies for her sake.
