One technique that I found effective in encouraging students to ask questions in class was to have students write up a question at the start of class on a sheet of paper with thier name on it. I would read the question aloud in class without disclosing their name and get other students to respond or comment on the question. This encouraged participation from the entire class, showed that there was no such thing as a 'stupid question' and moreover as the weeks progressed, students who were shy in the first week of class gradually started to raise their hands and ask questions rather than penning them down on paper.