I agree with the slipcovers thing...they'll save your furniture.
As far as decorating to MATCH your pet...it's a cute idea, as long as you keep in mind that the actual dog is more than an extension of your decor. I've seen folks get RID of their animals, because they no longer matched their carpet, drapes, etc.!
But, to decorate to CELEBRATE the spirit of your pet, there's all kinds of cool ideas, if you're crafty!
1. Get an old lamp, and redo the shade...take black and white photos of your pooch, and mix up equal parts water and elmers glue...with a paint brush, brush the entire outside of the lampshade with the water/glue, and secure the photos how you'd like them to the lampshade...and then, brush the water/glue mixture over the top of the photos and lampshade once again...voila! The photos will dry clear, and appear to be embedded on your lampshade!
2. Take a photo of your dog, and take it to your nearest Wal-greens photo lab, or another photo lab that offers the "throw" or "blanket service." Many photo labs will take the picture, and create a personalized blanket with the picture on it! Cute for your dog's favorite couch or chair!
3. Make a collage...take photos and pictures of your dog, arrange them in the desired way, mount them on a nifty matte board, and have your creation framed!
4. Flower pots...you can find an artsy friend to paint your dog's image onto some clay pots in various sizes, or, paint a pot in the desired colors, allow it to dry, and take photos of your dog (as described in the lampshade part above), and do the water and glue trick...cute!!!
5. Find someone to do a large "family portrait" of you and your dog! You'd be surprised how many talented high school artists you could commission cheaply who will do a good job! They're in practically every high school!
There are many ideas out there that are cheap and fun to do...