We had an un-official 'dogs allowed' policy at my last job. It all began with the owners wife bringing their dog in when she'd come to visit.
Then one day I brought my Bullmastiff in because not many people were going to be in the office that day, and she's content with just sitting under my desk for hours on end. Girls in the front office would bring in their dogs who were pretty well behaved. It was nice meeting other peoples dogs.
Then another developer brought in his Beagle. A dog howling every 10 minutes is very, very distracting, especially in an open-layout office. Someone in customer service brought in their 1 year old Labrador, who I'm convinced was fed a diet consisting of canine Red Bull.
At some point, people in graphics started bringing their cats in. I came in one morning to find a cat on my chair. I did not bring my dog that day or things would have probably gotten very interesting.
If I took anything away from that, I'd say pets are okay on Fridays, or holidays when not everyone is in the building. But for every day, pets are just too dang distracting. Eating out of trashcans, snooping around the office, scaring visitors, and just people in general wasting time playing with pets all day. The biggest benefit is taking your pooch for a walk at lunch time is a great break.