I've noticed that my dog's nose is always runny, wet, and cold.
It seems like that's a good thing.
However, if my nose was runny, wet, and cold, that's not a good thing.
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I started to dig into this because you caught my curiosity itch with the question... Given the usefulness of dogs in our daily life, especially with respect to the value of their sense of smell, it's not surprising that some research has been done on the nose of the dog.
So... a 2008 study from Pennsylvania State University discusses the fluid dynamics of a dog's nose and comes to the essential conclusion that the wet nose allows them to pre-sort the different odors so that each individual odor can be distinguished from another. Basically, the moisture acts as a form of filter that allows for different scents to reach different points in the nasal passages, thereby allowing fine-tuned assessment of the information.
Other theories, are a little less dramatic and include:
I'm generally inclined to the more scientific theory, but I think there's an element of all three.