I go to training classes with Dog Trust and we have a terrier in the class who displays all sorts of anxiety like yours, I have noticed a huge difference in him over the past weeks, albiet it is very slow but he is getting there. The trainer keeps him away from other dogs and is gradually bringing him closer until he is comfortable being nearer. I can see the difference in him after about 8 weeks. Have you tried classes with him yet? My Patterdale can display aggression if you let him and I have to constanly keep on top of him but he too has improved enormously. I rescued another full dog recently and they now get on fine as long as I dont them get into potentially challenging situations ie over food etc. Terriers are not called terrorists for nothing are they?