I love having my dog in bed with me at night too. As for the dominance thing, there are certain rules that should be followed if you want to keep a dog in bed with you.

Since wolves, our dog's true identities, are social animals, they often sleep closely in the pack. The alpha is generally the only one who gets to choose where they sleep and the others fall in based on pack hierarchy; the closest dog being beta, etc.. Nonetheless, they are used to sharing a bed (sleeping area) and their inability to do so represents disfavor with the pack. This means that keeping your dog away from you in sleeping arangements may make the dog believe that they are Alpha (they have a choice after all if they have the run of the house) or like an outcast.

In a home with children, however, things get a little strange. If you allow your dog to sleep with you, your dog will feel that it is above your children in the pack order. Some behavior problems can arise from this. In these cases, the dog should sleep with the youngest child old enough to handle the dog.

If this is not the case, however, the only thing to worry about is that the dog does not sleep or lie on your pillows. The closer the dog is to your head, the more power it believes it has in your household. Allowing your dog to share your pillow is tantamount to declaring it Alpha or co-alpha!

I let Sophie sleep in my bed, but she is at least half way down the bed from me. The one time I caught her on my pillow, I gave her a mild verbal reprimand. That was all it took to get her to not do it again, and when I caught her, the look on her face told me that she knew that she was doing something wrong (sort of like trying out the boss's desk and chair and getting caught)!