Hi A.,
I would recommend reading a book called "Healthy Sleep Habits, Happy Child" by Dr. Marc Weissbluth. I went through the same thing with my daughter and was at my wits end. Se would only go to sleep if she was on me and during the day sleep for no more than 30 minutes at a time.
I read several books and didn't like most of them because they were just someone's opinion on what you should do with your child (and Lord knows there is a million opinions out there) This book cited actual studies.
First it stated that a child does not get restorative sleep if they sleep less than 45 minutes at a time or while in motion (i.e. in a car or on your chest.)
Next, it recommended putting your child to bed earlier at night starting at 15 minute increments. My daughter went to bed between 8 - 8:30 at that time. She also would not go to sleep unless I was either holding her or laying right next to her. The book recommended letting her cry. I was extremely against the "cry it out" method, but because neither of us were getting any rest, I decided to try it. The first night she cried for 15 minutes (felt like 4 hours). The next night she cried for 5 minutes, and she has never cried after that. I gradually got her down to a 6:30 pm bedtime and because she was getting the rest she needed at night, she began sleeping alone and longer during the day. I guess when you are overtired, your body produces cortisol. This acts like adrenalin, making it harder to get to sleep. The more sleep you get, the easier it is to fall asleep. The book also recommended the cry it out method because children need to be able to self soothe. If they are always relying on someone or something (car ride, etc.) to soothe them to sleep, they will have sleeping problems the rest of their life. I've asked around and everyone I know with sleep problems as an adult, were not self soothed as children.
Anyway, my daughter is now 2 years and she goes to bed every night at 7 pm and takes a 2 - 3 hour nap a day.
I am a childcare provider and have recommended the book to my parents and also my sister and a couple of friends. They all say it was a lifesaver. It is a little boring, but worth the read. It also has different ages, so you can see what to expect as your child gets older. The one I bought is an older version and almost 500 pages. He has since come out with a revised version that is much shorter. Not sure what was omited, but if you can find the older version, that's the one I'd recommend. White cover, published in 2003.
Good luck!
E.