I copied over the Dwarf entry to the Common_Domestic.txt and then took out the [Intelligent] tag. Added in [CAN_CIV][CAN_SPEAK][CAN_LEARN][COMMON_DOMESTIC][trAINABLE][PET][PETVALUE:30][NATURAL] in its place. Dwarves and dwarf children show up on the embark screen for 1pt (despite being valued at 30). If you buy them, they start off as peasants and you can assign labor and everything else the guy above said he can do.
Only problem--as soon as I added the Dwarf creature_standard entry (without modification, I might add) to the Creature_Domestic.txt, I always started the game as Humans. Even after adding all the tags above, I'm still forced to start the game as humans.
How do I fix that?
EDIT: I just renamed the new domestic pet dwarves to Dorfs, renaming all the craftdwarf, etc. named in the tags and then re-embarked on a newly gen'd world. I started the game as dwarves, had dorfs (16pts), child dorfs (16pts), hunting dorfs (31pts), and war dorfs (31pts). Awesome!
EDIT2: I was wrong about the [PET] and [trainable] tags! You don't need them--they make them into dogs in the sense that they can be trained or slaughtered, but they can't be assigned labors. Save the game, take out those tags, and then restart, and they'll act like dwarves again. Problem solved!