The Original Poster has not made a post since Dec, 2011. Any decision made was almost 2 years ago.Have you thought of getting a high cat tree?
In our small room, our 80' cat tree is wedged in a corner and it offers a safe "overseeing" spot for my cats to go when a child or something is over to visit. Perhaps what your kitty needs is a place not to feel threatened?
I don't think you should re-home either. You just need to slooooooooooooowly make her accept that you and your dog are part of her pack. Keep doing what you are doing with reintroductions but don't give up!!