[2+2 Junkie]

I had the almost the exact same thing happen to me. I played mostly live games my whole life (NL), and when I decided to play internet poker for a while for fun, I did well. I then decided to learn small stakes, and the more I learned (Small Stake Hold 'Em) the more I began to lose. I just couldn't understand why people wouldn't fold and became frustrated because in NL, I could push those fish right out.
However, you need to know why you are making moves, not that you are supposed to play this way or that because the book tells me. This was my biggest problem. Pour hours into SSHE and into this site, where there are many qualified people that can help you with each section that you don't understand.
There are bad beats, there is varience, there are bad runs. However, if your play is correct, you will beat these games.
Good luck!