This raises a significant point. First, back to the OP:
we don't know. Canine intelligence varies, and individual behavior varies so widely as to be really amazing, as many stories here illustrate.
Now, in response to what I'm quoting here:
someone else said in a different thread that "it seems most people are either dog people or cat people." You and I illustrate that point. Ever since being laid open by a cat that gave all signs of being friendly when I was about 5, I've been leery of cats. Scarred for life, both literally and figuratively.
Which brings me to my point: the absolute worst thing to do around a dog is to be afraid. The saying goes "dogs can smell fear." The dog whisperer does a good job of bringing out the truth that the idea of dominance is pretty important in a dog's world. If it senses fear, it will naturally assert dominance, and see how far it can take that. Rarely does that turn into deliberately causing injury, but "escalating quickly" is what many breeds are selectively adapted for; as responders, not initiators.
So the primary key to understanding dogs is how to assert dominance without causing injury, or even being threatening. I suppose in simplest terms that could also apply to some basic parenting skills, at least while very young.
Now what you said here is not that you're afraid of dogs, but that you're nervous around them. To a dog, the difference between these two seems to be larger than it is to us! Nervousness is part of their repertoire, with nervous energy being pretty typical not only when meeting a new dog for the first time, but also when greeting dogs they've lived with their whole lives and only been apart from for like 15 minutes.
Nervousness and curiosity go together naturally for dogs. If you get the chance to watch them interact together see if you can detect this. Once you get a handle on how they express this with each other, try to recognize the same things in people who interact successfully with them. The keys are eye contact, body language, and tone of voice; with the actual words used being pretty far down on the totem pole. As humans we tend to place primary importance on word choice, whereas dogs use a different "vocabulary."
For us, nervousness and anxiety naturally go together. That's ok too! Dogs participate in anxiety, and recognize it as being distinct from fear. So we have acceptable "channels" to convert our fear around dogs to; nervousness and anxiety work well. If we verbalize this as we greet a dog, it's for our benefit while we "might as well be speaking Greek" to them. If you honestly process these emotions aloud, I bet you'll be able to see it on the dog's face that he understands you, and has some common ground. This will be due to your tone of voice and your body language. Meanwhile, you'll be "talking yourself down" from fear. And it'll work!
Even if you never deliberately choose to get "hands on" with a dog which does include at least being willing to get a bit messy, this info might help you navigate a tight spot you wish you weren't in.
"Asserting dominance" over a dog is as simple as 1) you're human, and 2) you're taller than the dog. No need to try to make yourself appear bigger than you are, dogs accept us as naturally being in charge. Our attention is equally as rewarding as food (speaking in general terms, of course)
Dogs are easy to understand. Cats? I've never had anybody able to explain them to me but they're easy to avoid, whereas dogs can press you into a confrontation.