What's the difference between a dog and a wolf?

OK, so wolves and dogs don't really look alike, and the wolf has a bigger brain, and dogs are much better at worming their way onto the sofa. But they are genetically very similar. So what's going on?

Study one: morphological differences between wolves and dogs
You may have heard of this one; it's been getting a lot of press in the past few years.  A group of Russian researchers back from 1959 tried to manipulate Silver Foxes to make them tamer.  At a fox farm, they selected the foxes that were least fearful of the approach of the human hand.  Over the course of several generations, lo and behold, the selected foxes were indeed tamer. But other changes started happening too. For instance, their ears drooped, their tails lifted, their coats changed color, they started barking, and they even started having two 'seasons' per year instead of one. Do these attributes sound familiar?

Study two: social cognitive differences between wolves and dogs
In a two-way object choice task, a dog or wolf subject had to choose a container baited with a treat out of a choice of two, based on pointing cues given by the experimenter. That is, there were two containers on the floor, and one had a treat inside. The experimenter pointed at the container with the treat, and the dog or wolf then made a choice of where to look for the treat.  There was no deception here; the experimenter always pointed toward the baited container. The researchers examined the responses of dogs and extremely well-socialized wolves at the age of eight weeks, four months, and one year.  The results were comparable at eight weeks and one year, but the dogs did better at four months old than the wolves.  Throughout all of this, the dogs learned much more quickly and easily to make eye contact with the human carers and to generally be sweet.  The wolves took much longer, but they did eventually learn to make eye contact and cooperate with the humans, and that could account for their similar performance at one year old.

So, can you turn a wolf into a dog by rearing it like a dog? No. Wolves raised like dogs are still different from dogs.  But, they can still eventually learn to communicate with us, it just takes longer.  It may be that the domestication process has given dogs the inclination to cooperate with us.

The subject of social cognition in the dog has a growing body of literature looking at the interplay between domestication and learning.  I only cite one article on that topic here, but it's worth knowing that there's plenty of good reading on the subject if you're interested. 

References
Belyaev, D., 1979. Destabilizing selection as a factor in domestication.  Journal of Heredity,  70: 301-308.

Gacsi, M., Gyori, B., Viranyi, Z., Kubinyi, E., Range, F., Belenyi, B., Miklosi, A., 2009.  Explaining dog wolf differences in utilizing human pointing gestures: selection for synergistic shifts in the development of some social skills. PlosONE, 4: e6584.