I am shocked at this - what are people thinking? I have a barn with horse stalls and a garage and my own dogs' kennels. I think if they brought a dog that wasn't invited I would require - not ask, but tell - them that the dog stayed in one of those 3 places, their choice, but it wouldn't be running through my house and chasing my animals!
I guess we've been lucky. Our friends don't abuse the privilege. There was only one time we've had a dog on the property uninvited, and that was our former minister...and after we told him that our horses would chase and kick the dog, he basically kept him on the leash or in the car.
Just because you love animals and your husband's a vet doesn't mean that you want to live amongst pee and poop in your house, especially thoughtless people's pet's stuff. Good grief....
As far as the dog sitting, just say no. Tell her that your household insurance doesn't cover a dog-sitting business in your home, and if something happened, yada yada. This person has no right to expect that!