How Much is that Doggy in the Window...

I have a moral dilema. Our 6 month old dog, Barkley, is driving us crazy. He is very cute, but I think that may be his only redeeming quality. Yesterday, he peed in the house 4 times- once on Zack's blanket, once on Maycee's newly washed comforter (newly washed because he had lifted his leg on it the day before), and twice on my bed (on our nice comforter and sham, and on the pile of newly washed sweaters I had just folded and set on my bed). Every time I let that dog in the house he would go and pee on something. And, every time he did this, I would make him smell it, in my angriest voice tell him that was naughty, and then put him outside in the freezing cold. I just don't get why he would still do it over and over. He has never mastered the outside potty task. It seems like at least once a day, I'm cleaning up some kind of doggy accident. Today he pooped in Zack's room. Aaugh! I am so tired of cleaning carpet and washing everything! This is not his only problem, however. He gets really riled up and kind of nips and scratches at the kids. I must say, the kids usually start this, but not every time. And then, there are tears shed and band-aids given. But, this is several times a day. I can't stand it anymore. And, I can't just leave him outside, it's too dang cold. So, this brings me back to my moral dilema. I feel terrible about this but, I think we are going to take him to the Humane Society or the Animal Shelter. I feel bad because I have had a dog in my house all my life and have never had problems like this before. I guess I just don't know how or have the patience to train dogs. I also feel bad because Ryan's brother and his wife gave us this dog and I don't want to hurt their feelings. More guilty feelings- I don't want Barkley to go anwhere but a happy, nice family that will love him and take care of him. And, I can't totally gaurantee that. But, even with all these reasons, I think he still really needs to go. I already have enough around here to take care of! He is adding stress to my life. So, am I just giving up, or what? Am I a loser because I can't handle it anymore? Or, is it OK to admit when you are defeated and you try to fix things the best that you know how? Any thoughts? Council me please!! Brett and Steph- don't hate us!! Animal lovers everywhere- I'm sorry! Do YOU want a new dog?