medium flopped flush, how do I manage risk vs. reward?

[Pov]

I'm a decent small stakes limit player and I decided to play some NL for a change of pace. Would someone please walk through my thoughts below and tell me if they make sense and what alternatives I should have considered? Please tear into me, I realize I am a NL dunce and my ego can handle it.

Villain is a 60% VP$IP with 17% PFR. So far I have shown down rockets and AQo and am just under doubled up for the max buy-in.


Party Poker No-Limit Hold'em, $ BB (10 handed) converter

MP1 ($21.55)
Hero ($42.75)
MP3 ($8.8)
CO ($19.4)
Button ($45.48)
SB ($34.27)
BB ($22.02)
UTG ($27.5)
UTG+1 ($87.05)
UTG+2 ($32.07)

Preflop: Hero is MP2 with 8[img]/images/graemlins/diamond.gif[/img], 7[img]/images/graemlins/diamond.gif[/img]. SB posts a blind of $0.1.
<font color="#666666">3 folds</font>, MP1 calls $0.25, Hero calls $0.25, MP3 calls $0.25, <font color="#666666">1 fold</font>, <font color="#CC3333">Button raises to $1.5</font>, <font color="#666666">2 folds</font>, MP1 folds, Hero calls $1.25, MP3 folds.

I wasn't particularly happy to call here out of position, but I thought the price was worth seeing a flop at 2:1 against this particular opponent. Marginal play or horrible?


Flop: ($3.85) 2[img]/images/graemlins/diamond.gif[/img], T[img]/images/graemlins/diamond.gif[/img], J[img]/images/graemlins/diamond.gif[/img] <font color="#0000FF">(2 players)</font>
Hero checks, <font color="#CC3333">Button bets $3.99</font>, <font color="#CC3333">Hero raises to $20</font>, Button calls $16.01.

I checked to the raiser figuring he would bet. He didn't disappoint me with a pot sized bet. Here is where my major question arises. I was very confident I was ahead, but I was worried about a singleton diamond out there so I figured I needed to bet big to kill the draw and if he folded I would be satisfied with the pot as it stood. Due to inexperience I didn't realize that a raise to $20 actually gave him much better odds on his draw than I thought it did. I think I got a little gun shy because I wanted enough left in my stack to go all-in with if a non-diamond hit on the turn.


Turn: ($43.85) T[img]/images/graemlins/club.gif[/img] <font color="#0000FF">(2 players)</font>
Hero calls $21.25 (All-In), Button calls $21.25.

Okay, so I don't like the board pairing particularly, but I'm probably not folding getting 3:1 on my money if I check and he goes all in so it seemed like a much better idea to do it myself.


River and results in white below: <font color="#FFFFFF">

River: ($86.35) 5 of diamonds (2 players, 1 all-in)

Final Pot: $86.35

Hero has 8d 7d (flush, jack high).
Button has Ad Qh (flush, ace high).
Outcome: Button wins $86.35. </font>


Thanks for your assistance all.