This situation seems to be more along the lines of a Schrödinger's Cat problem; the Heisenberg Uncertainty Priniciple states that as your measurements of momentum of an object become more and more accurate, your idea of the object's position becomes less so. Evidently the explanation for it is something about wave/particle duality or something like that. Unless you're talking about the velocity of your dog, this doesn't seem to be the right theory here.

Anyway, the dog wagging its tail is pretty much the same thing as the Schrödinger's Cat problem. Strangely enough, so is the question "If a tree falls in a forest, and nobody's around, does it make a sound?"

The setup runs thusly:

You put a cat in a box, and you have some radioactive material in there. If it decays, a Geiger counter detects it and smashes a bottle of poison. If you look at the box from the outside, there is no way of knowing whether the material has decayed or not, and therefore whether the cat is alive or dead. The cat now exists in a ghostly quantum state of being both alive and dead until you look in the box.

So, when not being detected by anything, dogs both do and do not wag their tails ... at the same time. Bum bum bum.