I've seen the ones you're talking about from our childhood sold at Walgreen's drugstores in their toy department/aisle. They're usually about $8-$10. They are not rugged, but I did buy one of these for one of mine when he was about 2. The dog itself held up pretty well. It's the cord attatched to it, that doubles as the leash and remote control for the dog that is the problem. The cord is very thin, and in time weakened from being dragged and carried, and eventually snapped off the dog. But no sweat. We just bought a second one. :)
Later that year, we bought him a Fur Real Border Collie dog named "Skamp." It can be taught tricks and to respond to voice commands. He can bark, sleep, snore, whimper, take a treat from you, shake hands, respond to being petted, yelps if you pull his face, ears or tail, will sit up and lay down, but he doesn't walk. He was about $40 and we got him at Toys R Us, though I've seen these and other Fur Real animals at Target. For some reason they are sold in the "girl" section of the toy area. Boys love this thing...just ask my sons and their friends. They can't get enough.
http://www.youtube.com/watch?v=4uKCv7AWNvY
http://www.kaboodle.com/reviews/fur-real-friends-scamps-m...