Daisy has this problem and it has progressively gotten worse and worse. I used to feel confident that if the other dog owner agreed, and I allowed her to approach the other dog right off the bat, then she would always be friendly. I could tell that the lunging and barking were frustration at not being able to run right up to the other dog like she wanted to. Now, I can't count on that. In fact, I KNOW she is not likely to be safe with the other dog. She has gotten to the point where when I allow her to approach the other dog, she strains as hard as she can at the end of the leash, at first sniffing the other dog's snout in a very tense way. Then, more often than not, she will attack them either by biting at their face or trying to jump on their back! Of course, I am hideously embarrassed at that point, and so mad at her that I don't know what to do with myself. I apologize and apologize and try to explain that off leash she is a different dog, but I know if I were the other dog's owner, I would be so mad. She's never hurt another dog, but obviously this cannot continue. It is so awful that now I know that I just cannot let her approach another dog on a leash. I just try to avoid as much as I can.
I took her to the dog park a few weeks ago, just to see how she would do off leash (but expecting the worst, I have to admit). She was perfectly fine! I was amazed. 3 minutes after leaving the dog park and getting on the nearby trail (now on-leash of course), we pass 2 yorkies and she loses her mind again!
She is also not too bad at the at the vet where there are lots of other dogs, although she gets very hyper there. But she's never shown aggression there, even on leash. It's just on walks where both dogs are on leash that she freaks out. I'm sad to say that going on walks with her where I know there will be lots of other dogs has just gotten so stressful that I don't do it. It is limiting her life and mine, as there is a great greenway trail where I would love to go with her regularly. The teacher in our last obedience class agreed that she is nowhere near ready to go on the greenway trail, given her extreme dog reactance.
I've tried the distraction with treats thing as the other dog is approaching, but she is just so fixated on them that even if I hold an extremely high value treat directly to her nose, she just shakes it off to stare at the other dog, and then as it comes closer, she goes ballistic. Or, if I walk her the opposite direction, she will still not break eye contact with the other dog, and she walks backwards behind me, jumping, snarling, etc. By the end of these walks, my blood pressure is in stroke range.
The distraction method worked for cars, completely breaking her horrible car-lunging habit last year, but dogs (and cats) are a different story. She will literally start stalking posture and movements when she sees another dog, even from very far away.
I've done a lot of reading on the problem and I contacted a trainer about it because I will do anything to solve this, but she said she wasn't taking any more clients. She was the only completely positive-based trainer I had been able to find in our area. I may call her back and see if she can recommend anyone else.
I agree with the website you posted that I need to go slower and give her lots of successes in less-challenging situations, and then work my way up. That is consistent with the other things I have read. Coming up with those situations on a regular basis is very hard to work out. I watch those trainers on Dogtown and their full-time job is getting dogs over issues like this, and I often think I would need to spend full-time on Daisy to be successful as well. I am committed to helping her, though, so I am going to try the parking lot at PetSmart idea, while we are sitting in the car. Baby steps, baby steps.... Patience, patience....