Hm. If I can get Thor into a Sit before the other dog goes by, 95% he won't bark now. I try very hard to distract him so that most of his attention is on me and that yummy treat in my hand before the dog comes by. Then I'll feed him treats, or have him continue to Watch Me as the dog passes.
I also stand in front of him, since I've read this makes the situation less intense for both dogs.
If he barks, I say Too Bad, put the treats back in my purse, and drag him off.
If we're just walking by the other dog, I slap the treat bag on my leg to make a distracting noise associated with food.
At the rescue I volunteer at, they always say, "Distract and Reward" - make a weird noise to get the dog's attention, then throw the treat a distance away. Dogs usually can't resist chasing the treat. For Thor, I want him to practice his impulse control, so I make it a little harder for him, though perhaps I shouldn't.
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