Last weekend a friend had a barbeque for their 40th birthday, and I went along with DP and our dog. There was a child (about 7yo) at the barbeque, who unfortunately was phobic of dogs, and screamed and ran away whenever our (very friendly and non-agressive, but rather large) labrador came into the same area as him.
Anyway, the interesting thing is that our dog wasn't the only one at the party - host himself had just acquired a new 2 month old labrador puppy, as his birthday present to himself. Obviously this puppy was tiny and absolutely adorable. Even so, the phobic child was still EXTREMELY wary of it, didn't want to get to close, didn't want to touch it AT ALL etc at the start of the evening. If it brushed past him he would do the screaming and running away thing.
But, as the evening went on, the evident adorableness of this puppy just became increasingly fascinating to the kid, and he would let it get closer and closer, eventually he would reach out and touch it then withdraw his hand really really quickly. He was still very skittish, but after a few more hours him and this puppy were best friends. He could not get enough of it, was picking it up, playing games with it, stroking it and he didn't even make a fuss when it tried to chew his shoe.
The kid still wasn't enamoured of our own dog, but I observed that at the end of the evening he wasn't showing signs of fear when it was in the same room any more and was totally coping with it being around. Obviously the puppy was way cooler though, so our poor old dog didn't get much of a look-in in terms of play-time ;-)
Anyway, so my advise would be: try to get your hands on a puppy. Obviously not as a permanent addition to your home, but maybe if you know a friend who has a puppy, or if there's some kind of animal shelter nearby or anything like that. No-one can resist the cuteness of a puppy.