I have always been fascinated by this behavior and have heard a number of theories about it, including that the dog is trying to mask its scent or trying to take the scent back to the pack. The theory that seems to be the most logical, however, is that the dog is experiencing a sensory rush much like someone listening to their car stereo at full volume.

Dogs, of course, have a sense of smell that is exponentially more developed than that of humans. Dr. Bruce Fogel writes extensively about that in a chapter in his excellent book, "Understanding Your Dog's Mind".

As far as dog behavior, I always recommend Patricia McConnel's "The Other End of the Leash - Why We Do What We Do Around Dogs". It's brilliant and very accessible.
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