How does a dog think?

As a first-time dog owner/parent (and former psychology graduate student), I am often concerned about how Hershey perceives things, what she is thinking, and how she deals with different situations.

For instance, she will sometimes look at us with a cocked head and a quizzical look on her face. She loves watching us do different things like putting away dishes or working in the garage. She will also poke her head around the corner to watch us do laundry downstairs - but she seems afraid to come down into the basement (mind you our stairs are very rickety).

Hershey absolutely freaks out about the lawn mower, she barks and seems like she wants to play with it, but keeps her distance. When I put her in the house, she will actually jump on top of her crate to watch me mow the backyard through the window. She isn't' afraid of the vacuum per se anymore, but she will follow me around while I clean up - the Swiffer mop is similar even though it makes no noise.

We are letting her free through most of the first floor now while we are away - I wonder what she does when the answering machine picks up?