IMHO killing dogs has no negative effect on any quests.
I personally is not a dog killer, but dogs were hostile in my game, maybe I killed that aggressive Lar dog? <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
Ohh and I don't kill bunnies, frogs and even rats. I leave all friendly beings to their lifes <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
(as Egin is walking away you can notice large pacifist sign on his back) <img src="/ubbthreads/images/graemlins/cool.gif" alt="" />