Help! Cat keeps attacking new kitten!?

I have a 7 month old neutered male-we have had him since he was about 8 weeks old. Since my husband and I work all day we decided to adopt a playmate for him - about 2 weeks ago we brought home a 3 month old female. When we got her from the shelter she had a pretty bad upper respiratory infection...for the first two days the only contact the two had was through a cage and my male would just hiss and growl at her. We took her to the vet for her infection and the vet told us since uri's are so contagious that we needed to isolate the new kitty completely til she got better-so we did. She is now all better so for the past 4 days we have been trying to introduce them - they are perfectly fine together as long as new kitty is in the cage (they will bat at each other a bit but it mostly seems playful) but as soon as we let her out of the cage the boy goes crazy attacking her! To the point that she starts crying and we have to pull them apart. She tries to fight back but since she is smaller than him she sometimes has a hard time. Sometimes she will try to run away and hide and other times she will just keep getting right back in his face and they start fighting again. I'm not really sure what to do because they seem to be used to each other's scent - I have done the exchange of blankets and my boy will knead and sleep on her blanket I just don't understand what the problem is. I've read all the articles about cats being territorial and all but I just find it strange that he only gets upset when she isn't in the cage. Is there any hope for my two babies? I want them to get along so much and I'm getting really stressed out about it. Oh and if I put her back in the bedroom after he gets too rough he will walk around and meow very loudly looking all over the place for her..I just don't get it. I'd really appreciate advice from someone who might have gone through a similar situation so I know if they will ever get along or at this point I would be happy with them just tolerating each other so the new baby doesn't have to be locked up in the bedroom or in a cage all the time.