Anyone who has ever had a dog knows that they can understand you. An article in last week’s Economist, 2/21/04 "Sensitive souls", describes an experiment that proves it. Brian Hare from Harvard University did an experiment where he put food under one of two inverted cups. A human then sat behind the cups and indicated the cup with the food, either by pointing, looking, or tapping. Dogs always got the food. Chimpanzees and wolves didn’t do any better than chance. He even tried it with dogs with little human contact. Dogs could read the human experimenter’s facial expression and figure out which cup the food was under.
So dogs can read your facial expression, and within reason, figure out what you’re trying to tell them. But then anybody with a dog knew that.
Although my experience has been that they can understand lots of words. They just get left behind in the grammar arena. Telling a dog that someone is not coming after you’ve told them they are coming, is impossible.