Thanks, Lake, I have already taken numerous steps so that S80 (the older dog) won't feel left out, unwanted, etc. I actually spend a lot of time with her, Car-rides (to visit 'daddy' at work), pet stores, walking in the park, etc. and she is very well-adjusted. She doesn't appear to be jealous at all, but perhaps things will change once she sees that the puppy will be staying... who knows, but I do reassure her, and give her lots of attention.
She accepts the puppy and wants to play with her and get to know her, but the puppy is defensive. I think the puppy needs to learn some manners and be socialized. (The only other dogs she's been around are her parents, brothers and sisters). Maybe she's confused and doesn't know how to react to a dog that isn't a family member.