How do I reassure him without making the problem worse

Max is quite a jumpy fella. If he's laying down in the hallway and I walk past, he flies up and moves out of the way, even though he's not in the way. If clothes are being hung out to dry or folded, he finds somewhere to hide, or tries to get on someone's lap. If he's at the vet and on the floor, he'd stand behind my legs.

BUT when he's on the lead out for a walk he barks at people and dogs. He's bitten a person when he was in a situation where he was on the lead and someone reached down to stroke him. If he gets to sniff the other dog he quicly loses interest but his posture is not very comfortable. If the other dog tries to initiate play and he can't get away he get's snappy (but has NEVER bitten another dog). He usually tries to run over to me (the whole hide behind my legs thing) but if the dog follows him he snaps.

When friends are over, they can't touch him or put their hands near him until he's had a sniff of them and relaxes around them. Then he's happy to play with them.

Walking him is no fun for me, honestly. It's a nightmare because he acts like a maniac. Having people over is stressful because I'm always worried he'd bite if they move too suddenly when he's not yet relaxed.

I've tried all sorts, but I think the root of the problem is that he's probably insecure and quite fearful. I'm wondering if there is any way to make him more confident, without making him worse? example, when the clothes are being hung out, we don't want to cuddle him and tell him it's ok, because I've heard that re-assures them that he's right to be afraid? How do we let him know that if we make a sudden movement he doesn't need to run out of the way, tail tucked between his legs.

If you calmly ask him to do something that is incompatible with the dashing about barking - e.g. put him into a Sit beside you, then praise him every time he does this it should help.
You will have stopped him doing what you don`t want and rewarded him for being a Good Boy (sitting). In time this should become the preferred behaviour, because he`ll feel safer beside you - that`s a nice place to be with the rewards and praise.

Yup, sounds a bit insecure
I would get him checked out for sight and hearing tho cos not being able to see things properly might make them more jumpy
Agree totaly with training an alternative behaviour, and remember to start with to reward for even 1s of the behaviour you want - dont expect him to sit through a whole load of laundry
and try and keep an eye that he isnt in a situation that he isnt coping with - so if people are round and you can see he is getting stressed give him a safe place he can go to - like a mat or a crate and just have people ignore him and drop random treats when he is chilled

Maybe when you are putting the washing out, have toys (or whatever he is into) with you and randomly stop part way through and play with him, so he figures that when you do the washing, play time is coming. It will make putting the washing out much more time consuming, but it will be worth it.

As for people, maybe get a couple of friends that your dog isn't familiar with and just get them to walk past you and you walk past them. Ignore any behaviour that you don't want.

I'll try with the clothes washing first and then with the friends. Sounds like a good idea to let him realise it's a fun time. Also good idea to let friends ignore him and drop treats.

I do put him in a sit, but he still barks his head off! Sometimes he get's so into it that he ignores my pleas for him to sit and bribing with treats doens't work. Usually have to catch him before he starts to bark to get him to sit, but then he'll sit, take his treat and then stand up and bark (or continue sitting and barking).

Wish me luck

Hi Sasha have you seen this article on Shy and Nervous dogs?

http://www.dogsey.com/dog-articles.php?t=8050

With regard to the washing, I would try to habituate Max to washing. If you have a clothes horse put one small item on it and put a couple of high value treats nearby, (like bits of chicken or cheese) then ignore it and him . If Max is ok with this put the treats nearer the clothes horse, if that is ok feed Max near the clothes horse.
You can then put another item on the clothing on the clothes horse and start again.
This will take some days and don't try to entice Max he must do things at his own speed, if he is too stressed stop at once .

I had a problem with a dog and and arch file boxes , I think the snaping noise they made reminded her of an elastic band which she was once teased with. I had Arch files on the floor for a couple of weeks with treats on top and she got over her fear

Agree about the visitors, Max needs to associate them with good things, so when they come ask then to ignore him/no word no eye contact but to drop a treat.
Once he has got used to their presence ask if they will crouch and call him to them to receive a treat, they should not approach him so he has the option to decline . Again no eye contact and crouching makes them smaller and less of a threat. If he comes give lots of praise in a calm soft voice. If he backs off and barks stop and ignore him then try again another time.

I find what works best with Jess (who kicks off at every dog she sees) is to keep walking. Don't stop. Just keep on walking.

You are putting him under pressure (in my opinion) if you make him sit and face what he doesn't like. Also, if you walk on, there will be nothing to worry about for him as the "danger" will have passed much sooner.

Just to say that we have a 10 month old who began to move towards some of the behaviour you are describing - i think she is quite a timid dog anyway - takes time to get to know strangers etc - one thing that has also helped for us is doggy play dates with dogs she knows - especially older and calm ones - I found that going for walks with an older calmer dog - she copied their behaviour around other dogs - i.e. ignored other dogs/just let them be
also calm rather than excited distraction - e.g. 'lets and go and look over there' or ' finding something inetersting on the ground - she is busy wondering what i am doing rather than noticing the other dogs
agree with all the other suggestions as well

be calm ..pick him up as his mom would apon occation..take a look at your body language,ignore the things that stress him out fallow through with a task ,do not speek,tone of voice allon can send a dog into flight stations even when there is no reson...act as if there is nothing to fear .......push to dog away from you when they look to you for support ....these are some ideas iv used to get possitive results