Training your dog is a long and rewarding process. By teaching your dog to obey you, you're increasing the quality of life for both dog and master. As with every healthy relationship, both parties need to develop an understanding of who is the boss, what their expectations are, and so on.
Imagine being able to take your dog out for a walk without being jerked around on a leash. Telling your dog to 'stay' and knowing that you won't have to keep your leash handy. Imagine letting your dog play with the kids and knowing that no one will need a band aid or disinfectant later.
When it comes to dog training, psychology is simple. Good behavior needs to be rewarded, and bad behavior needs to be corrected. By rewarding good behavior, your dog will learn to enjoy obeying you, and to associate good feelings with good behavior. Similarly, your dog will learn to avoid bad behavior, and all the headaches that could cause you, and, indirectly, your dog.
That's all there is to it.
Rewards are pretty easy -either by heaping praise on the dog, giving a thorough petting, Giving a treat, or what-have-you. Care should be taken not to overdo it. Rewards are rewards, not bribes, and if you resort to using rewards as bribes, your dog may learn to never do your bidding, unless you have tasty treats or a tennis ball on hand.
If you find that you don't like the idea of over-feeding your dog, you can use a technique called 'clicker training'. You'll need a child's toy that produces a loud clicking sound. The idea behind clicker training is that you should feed your dog some treats, and every time he gets a treat, give a loud 'click'. Your dog should eventually start associating the sound of the click with getting a treat, and from there, associate a click with good feelings.