kbaby
We had exactly the same problem with dd2 until she was about 9 weeks too. Even though she was our second, I worried about getting into wrong sleep habits, as dd1 had been so good at settling herself etc. I spent days on end carrying her from morning to evening, as she couldn't bear being flat on her back at all.
Now dd2 is 17 weeks and things are so much better. I can only echo what other people have said here - it does get better, and sometimes it's so gradual that you don't think you're making any progress, but you do.
Some things that did make a difference for us:
Cranial osteopathy - dd2 was a huge baby (10lb 9oz), and born very quickly. Her shoulder got stuck and had to be dislocated to help her come out. As a result, she was in a lot of pain when lying down. We had 4 sessions and the change was remarkable. Gradually she was happier and happier lying on her back, until she could do 45 minutes under the baby gym, at about 9 weeks.
A sling - in the early days, when I just couldn't take the screaming that resulted from putting her down, I did use a sling when I needed to do things like make tea for dd1 (aged 3), do her bath etc. However, I did limit its use as some babies do get used to being carried all day, and this can develop into a habit. This is not funny when they are suddenly weighing 15lb plus!!!
Swaddling - would really recommend this, as it can make babies feel secure. We had to wait until after the cranial osteopathy had finished, as in our case, it only made dd upset, because of the shoulder pain, but it was something we did right from the beginning with dd1, and it was marvellous.
Avoiding too much jigging around - it's really tempting to try all sorts of different methods to calm them, but I found with both dd1 and dd2 that what they actually wanted was peace and quiet and reassurance. This is why they liked being held - familiar smell and sound and movements. Both of mine hated the swinging chair - it only made things worse - although I know some people swear by them.
The best thing is to just take each day at a time, and be confident that this, like everything else, will be just a phase. You will move through this, and, looking back, wonder what you were worried about (mainly because something new will have cropped up to pre-occupy you!!!). The need to be held gradually goes as they become more aware of their surroundings and learn to filter out the mass of stimuli that hit them when they first come into the world.
HTH - good luck!!