Sydney has always been agressively mean to other dogs we run into on the street...but this weekend we had a breakthrough at a friends birthday party where she sort of made friends with a Sheltie (4 times her size). I think that Syd is just scared and covers it up with bluster and a ton of barking.
So I'd be patient if I were you and try to put her into situations with other dogs for short periods of time. I bet that eventually she will get used to them and want to play. If you don't have a dog park (we don't in my town) check with your local Petco/Petsmart/etc. and see if they have adopt-an-animal days. Sometimes local shelters bring their adoptable dogs into places like that one Saturday a month. As long as you are comfortable with the health of the dogs (there are 2 shelter here...and only 1 of them vacinates and takes care of the dog's health) it's a good place for her to meet a variety of breeds and sizes.
I hope she gets over her fear soon! It is so much fun to play with other dogs.