I always heard that they were colorblind. But this article from google might help: http://wiki.answers.com/Q/Are_dogs_colorblind
"Dogs are not color blind – they see color, but their chromatic acuity is significantly less than humans’. This is for two reasons: (1) dogs have far fewer cone cells in their retina (cone cells are responsible for seeing color); and (2) dogs are dichromatic (they see only two primary colors – blue and yellow) whereas humans are trichromatic, meaning we see three primary colors – red, blue, and green.
Humans have 7 times higher proportion of cone cells than dogs, meaning that when dogs do see colors, they are pale or faded. However dogs have a much higher concentration of rod cells, responsible for seeing black-and-white, and also much more sensitive in lower light conditions. For that reason, dogs have much better night vision than people."
Who knows?! haha