My dogs know their names, I'm sure of it. In fact, I would go as far as to say that they know each other's names, as well. I talk to my animals a lot, and I try to communicate with them as best as possible. One thing I like to do, is tell them to find each other. I'll say Where's Buddy? And my other dog will run off through the house to find him.
I'm sure they have an understanding of words, but how they interpret them is what I'm not sure about. They may just make associations with the sounds and 'Wheres Buddy' just means go find the other dog. I don't know if they can distinguish between Buddy being the dog, and where meaning find him.