Dog's ********
Another usage with a positive sense is the dog's ********, based on the notion that a dog's ******** must taste good, as they spend so much time licking them. Sometimes this is shortened to just "the dog's" or "the ********" (see above).
Although this is a recent term (the Online Etymology Dictionary dates it to 1989), its origins are obscure:
etymologist Eric Partridge believes the term comes from the printers' mark of a colon and a dash;
another theory suggests it is a spoonerism of "box, deluxe", in much the same way that "box, standard" was corrupted to "bog standard", although this etymology is anything but certain. See article on WorldWideWords website.
"The dog's ********" fits in with several rhyming reduplications of positive meaning that were popular during the 1920s ("the bee's knees," "the cat's pajamas"). More recent expressions that follow the same pattern are "the mutt's nuts" or "the dog's danglies". A further positive aspect of "the dog's ********" is derived from their prominence or notability, as in the expression "it sticks out like the dog's ********".