This movie is my gold standard for Guest's work. Among dog people, there's a split between people who think it's funny, because it's basically true, and people who think it's not funny, because it's basically true. I fall in the funny camp. While the characters are slightly exaggerated, that "slightly" needs to be emphasized past what text is capable of. Of course, the humor works on multiple levels, so you don't need to be a dog person to enjoy the movie.
Like any Guest movie, what makes it work are the characters. For me, it's a toss-up between the gay couple who spoil their Shih-tzus rotten and the yuppie couple who have basically turned their Weimaraner neurotic with their controlling behavior. It's not just the way they interact with their dogs, but how the couples interact with each other. Gotta love the story of how the one couple met at Starbucks. Different Starbucks. Across the street from each other.