How can I get my dog and cat to get along?

I have a four year old Australian terrier, and adopted an adult cat from the RSPCA in November. Although I introduced them slowly as the vet recommended, the dog still chases the cat every time he sees him. This has resulted in the cat spending the majority of his time in his room, except during the day when he spends time outside and on some nights when he sleeps with me. Of course I feel incredibly guilty about this, and am desperate for them to get along so the cat can move freely through the house at will.What can I do to prevent this from happening?

First you need to let your dog know that he or she isnt the boss, and has no buisness telling the cat what to do. YOU are the boss. You can get a squirt bottle ( fill it with water this wont hurt her) and watch as the dog starts to chase or show too much intrest in the cat, squirt the dog saying NO KITTYS quickly and firmly. If after trying this a few times doesnt work you can put a leash on the dog, just let her drag it around the house and if she trys to chase the cat step on the leash or tug it quickly and firmly with your hand and say NO KITTYS. After doing this for a while she will learn that it is a bad thing to chase the kitty.If you have a plastic crate you could put in the room, whenever she chases the cat tell her NO NO BAD DOG, NO KITTYS. Then as a timeout she has to go in her crate and go get the cat so she can see him with you and talk to him and pet him and when you look at her say BAD DOG NO KITTYS. She will then learn that this behavior gets her locked up and she doesnt want that. When you let your dog chase the cat away shes getting when she wants with no punishment so she doesnt see this as bad behavior.After youve worked with her for a while you should be able to just verbally correct her by saying NO KITTYS whenever she shows intrest.