The Pros and Cons of the Dogs
Pros
1) Allows for early exploration while the Explorer finds Treasure.
2) With the Explorer card can have up to 8 war dogs
3) Dogs are pretty strong for such an early unit, and they are extremely fast
4) Available at start of game
5) Cheap (75 food) and take no pop spots
6) Built right on the battle field to almost instantly replace losses of up to 5 at a time!
Cons
1) Fewer Villagers, resulting in slower econ and advancement. What econ you do have will be geared almost solely towards food.
2) If your explorer is captured, the rush fails and you will likely lose unless you crippled them significantly
3) Somewhat micro intensive
4) Dogs can not attack buildings
There is no real build order with this strategy, build your TC whereever the cart starts off, have your explorer grab treasure and have your dog scout. When your town center is about 80% done start heading your explorer and dog near your opponents base. Villagers should grab the food crates immediately, use all food to build dogs and throw all villagers on hunting. As soon as your dogs are created start raiding their villagers, replacing dogs as needed (build villagers if you start to go over 200 food). Your first level should be used to get the additional 3 dogs. You will have to micro quite a bit, and make sure your explorer doesnt die.
Since dogs can't attack buildings you will just want to focus on taking out villagers for now. Watch out for outposts, they will eat the dogs up. Use shipments on food, you want about 8-10 hunting, 1-2 on gold and the rest on wood when you go to advance (take the outpost/wood option). Forward build your outpost and get a barracks up as quick as possible (and another house if you can afford it). From hear on out drive everything into milatary and use all shipments on troops.
Your dogs/explorer should never stop raiding the villagers while you use your troops to take out buildings. Often it is good to have 1 dog act as scout circling the perimeter of the base at all times to find those pockets of juicy villagers.
If all goes well you should have crippled his economy to point that he can not possibly recover from.
Countering the Dog Rush
Since I can not go against it (demo is single player only) I can only speculate on how to beat it. Possible options would seem to be attacking it head on with villagers/explorer in an attempt to take out the Explorer (dogs can not rescue the explorer, so the rush will end if the Explorer goes down unless he already has a barracks and a force of troops).
Outposts near key resources and/or garrisoning a couple settlers in the town center should help fend it off. Minutemen could be an additional option, though a highly expensive one.
Another option is when you see this rush happening to move villagers to other locations as there is no drop off, hidden villagers away from the base may not be spotted. If you can hit the second ager yourself and get some milatary shipments and a barracks the rush should be easy to stop.
Obviously, all this is speculation as only 2 of the races are currently available and there is no multiplayer is available yet, but I feel this is definitely going to be a popular tactic among the spanish...and potentially a very crippling rush.