I had the same issues at that time, and I didn't find "Healthy Sleep Habits, Happy Child" until 7 months! At that point, it was a godsend! I was so exhausted.
At 3-4 months, my baby, too would only sleep in someone's arms, or in her carseat on a walk in the stroller or while the car was moving. She definitely would not nap in her crib.
I didn't figure some of these things out until 7 months, after reading that book, but the comment about no more than 2 hours of wakefulness between sleep periods is TRUE and still held true even at 7 months. Once I started putting her back down for her first nap only 1 to 1.5 hours after she had woke up in the morning, she started napping much better overall....she went from 2-3 20 minute naps, to three 1 hour or longer naps. Early bedtime worked wonders too, we went from trying to put her down around 8 to 6:30 bedtime instead, and she went from waking 4 times a night to only one time to nurse at midnight, and sleeping 6 hours on both sides of that one feeding!!!! We also did do the cry it out(remember she was 7 months, too, so I don't know if I would do cry it out as young as your baby is....I can't remember what the book says for that age) , as explained in the book, first we did it at bedtime, and it took ONLY 3 nights to get her to go to sleep on her own with no crying....the first night she cried for 45 minutes before falling asleep, second night, only 20, and third night about 10, the 4th night, one squall as I closed her bedroom door, and then all was quiet. Then we did cry it out for naps, and it only took one day for her to understand that she needed to go to sleep on her own. Also, we put up blackout drapes over all her windows, we close her door(not latched, just pulled to the frame) and always have on a small floor fan and a CD with soothing music, which help block out the sounds of the house and the street, without those things (esp. the drapes) she would definitely not nap in there....it HAS to be dark for her.
Every since we got the going to sleep on her own figured out, she loves her crib, and will play about 20 minutes before going to sleep, and will also play after waking up, for up to 45 minutes - she doesn't cry right away when she wakes. I make sure there are certain toys that just stay in the crib, and she has 3 pacifiers in there, as well as a couple little books - these things are all a little older than your baby's stage, but they work wonders.....her mobile was wonerful - I had one with a remote control(until she got tall enough to reach it and pull on it - had to remove it) - another thing that was great was the Fisher-Price Aquarium - she learned to turn it on using her feet before she could even sit up on her own (I think that was around 4 months) , and it was a source of endless amusment and soothing lights and sounds (they make a model of that with a remote too, so you can turn it on from the doorway, to sooth them without them seeing/wanting mommy)!!
Remember, if they are rubbing their eyes or scratching their head, pulling their hair/crying, they are already TOO TIRED...at the first sign of slowing down/first yawn, start the soothing routine. We go to her room, leave all the lights off, and read 2 books, say a prayer, and then into her bed, with her favorite stuffed animal, Geoffrey, and a pacifier.
Good Luck! I am so glad I did follow the book, because I have a great sleeper now!