We have a 6 month old puppy (Bichon/MiniPoodle Cross).  Sweetest little thing very playfull and does what every little puppy does with the biting.  That is fine, but she has this thing where whenever she finds something she puts it in here mouth and starts to chew on it and no matter what we say she will not drop it.  If we go closer she usually stops chewing and sort of looks at you and if you dare touch her, she thinks you are going to take it away (which is the objective) and she bares her teeth and really gets aggressive so much so that she will bite you hard.

She has bitten one of my son's friends, me, and just yesterday my wife.  Took a while to stop the bleeding.  After the ordeal, she goes back to being herself as if nothing every happened.  If she does it to me, I usually grab her and take her to her crate and put her down and she goes in by herself.  Almost like she knew she did something we did not approve of.

But she does it over and over again.

My wife and I are not quite sure what to do. 

Help.

I presume from your post that you haven't taught her to leave. This is very important and really should be done from day 1 of getting your puppy as you are now suffering the consequences. :)

She is doing what comes naturally to her and is perfectly normal. Look at it from her point of view, she has something in her mouth, she is probably teething too, it feels good, she's getting pleasure from it, and then you come along and try to take it from her without offering her anything in return ;) In her mind you are stopping the enjoyment that she gets. Then it results in a confrontation that neither of you enjoy, she gets put in her crate and you get bitten.

I would suggest that the next time this incident occurs, you get a nice tasty titbit, or a favourite toy and distract her attention from what she is chewing, when she is distracted, gently take away the undesirable object and when she takes the titbit or whatever, lots of praise. By doing this, you are rewarding positive behaviour. You should really ignore bad behaviour and reward the good. It may take a few days for her to realise that she is getting something in return, but it works in most cases. I always teach my dogs from an early age that giving something to me results in reward, therefore they don't have a problem with anything being taken away. I also teach them to wait for their food until I say ok. When they are young, I also take away their dinner at a given point, by rewarding with a titbit when they leave it and letting them resume. I think this is important because one day you may have to take something out of their mouths or bowls that is a danger to them and they have to learn to give it up without a fight. Hope I am making sense  :)

  >If she does it to me, I usually grab her and take her to her crate and put her down and she goes in by herself.  Almost like she knew she did something we did not approve of.<

She has no idea that you don't approve, she picks up on your body language and tone of voice and responds accordingly. Dogs don't do guilt! ;) I would urge caution on taking her to her crate when you are not happy as she may come to view it as a "sin bin" and will very quickly come to dislike it.

This is only my experience of dogs, not the written rule :P

HTH