Here are some interesting studies I found on the subject since my assumption that it was an obvious truth didn't cut it. Should have started out this way, just didn't predict the opposition. So here ya go...the scientific method! Check it out 
Animal Emotions Provide Clues to Autism, Other Disorders-
http://researchnews.wsu.edu/health/141.html
"Do animals have emotions?
Look deep into her eyes ... Is she sad or do we just think so? Many scientists now believe that animals feel emotions too"-
http://www.timesonline.co.uk/tol/news/world/europe/article4595810.ece
Study Says Dogs Read Human Emotions on Faces-
http://petcare.suite101.com/article.cfm/study_says_dogs_detect_emotions_on_human_faces
"Researchers working in neurobiology and behavioral observation seem to be learning what pet lovers have known all along: animals have feelings."
"New evidence gathered from actually studying dogs, chimps and other animals, supports pet owners’ firm convictions that animals experience fear, jealousy, grief and love."
http://www.buzzle.com/editorials/8-10-2003-44071.asp
"Five years ago my colleagues would have thought I was off my rocker," said biologist Marc Bekoff. "But now scientists are finally starting to talk about animal emotions in public. It’s like they’re coming out of the closet."
Animal Emotions Provide Clues to Autism, Other Disorders-
http://researchnews.wsu.edu/health/141.html
"Do animals have emotions?
Look deep into her eyes ... Is she sad or do we just think so? Many scientists now believe that animals feel emotions too"-
http://www.timesonline.co.uk/tol/news/world/europe/article4595810.ece
Study Says Dogs Read Human Emotions on Faces-
http://petcare.suite101.com/article.cfm/study_says_dogs_detect_emotions_on_human_faces
"Researchers working in neurobiology and behavioral observation seem to be learning what pet lovers have known all along: animals have feelings."
"New evidence gathered from actually studying dogs, chimps and other animals, supports pet owners’ firm convictions that animals experience fear, jealousy, grief and love."
http://www.buzzle.com/editorials/8-10-2003-44071.asp
"Five years ago my colleagues would have thought I was off my rocker," said biologist Marc Bekoff. "But now scientists are finally starting to talk about animal emotions in public. It’s like they’re coming out of the closet."
Emotion = body chemistry (a leap, I know, but everyone will get what I mean anyway),
Fear = instinctual emotion.
So yeah, I'd say animals feel emotions.
I've heard from many animal lovers that dogs or cats are just as smart as us if not smarter. If this were so, my cat would've packed his Meow Mix and set off on his own years ago. He would've learned to build a complex structure for him to live. Et cetera. Et Cetera.
I do love animals. They are sweet, empathetic, wonderful creatures, and also none too bright.
Point: Animals feel emotion (whatever feeling emotions means) in a similar context as humans, but on a less evolved, simpler level. (this varies from species to species also)
http://www.videosift.com/video/Koko-and-All-Ball
When some jackass dresses up her poodle and says something to the extent of "My fifi wuvs her little outfit, doesn't she?" She's anthropomorphizing the dog and attributing it emotions it simply doesn't have.
I can surely agree that many animals experience simple emotions. Emotions are simply extensions of responses to physical stimuli, which are controlled in part by the complexity of the organism, mostly the brain. Simpler brain = simpler emotions. Emotions are also responses to memories of physical stimuli; a dog remembers that rolling over gets it a treat, so it learns to do that to gain a treat.
Bacteria does not experience emotions, but they respond to physical stimuli too.
One could argue that our human emotions are simply very complex physical and chemical responses, which manifest themselves in our consciousness and/or subconsciousness as emotions, and are completely determined by causality. This is in the end plainly obvious, if you believe there is no such thing as a soul or "ethereal" aspect of the material world.
I have pontificated!
(Sorry for bogarting the thread
i agree that emotional capacity differs from species to species -as I stated
ps. dressing up poodles is wrong
pps. PETA is even more wrong
We also have to be careful not to see patterns where there are none - when a dog "responds to you" it does not necessarily respond to your face, emotional stance or mood, it could just be doing what it always does, and you notice what it does for the exact reason that you are different than normal. This is the same with religious experiences. I will wager good money that all personal "evidence" of God are a product of either coincidence ("I heard a voice and stepped to the right, and then a car zoomed by. I was saved by God!") combined with selective memory (What about all the other time the voice told you to move and nothing happened? Note that this is not necessarily a conscious choice. Boring things tend to be forgotten, while extraordinary things are clearly remembered.) or simple retconning where more elaborate details are imagined and exaggerated (1 feather becoming 5 chickens).
Goddammit, why do I have to make everything about religion. Damn you, Jebus!
For instance, there's a big mirror in my room, and when I'm in here with my pups, they can see the reflection of me in the mirror, but they don't think it's another me. I think that dogs and cats consider reflections as some kind of superfluous state of being that just doesn't interest them as much as, say, the smell of your clothes after you've been around other dogs.
Anger is an emotion, and isn't it true that octopuses change color when they're provoked? I think that emotion is inseperable from awareness, and I think it precedes intelligence, and most creatures possess at least some degree of intelligence, however modest.