I remember seeing this film in England on one of the satellite channels.
It was really good and did make us laugh as my Grandma has a chihuahua.
The story is about a Mexican boy who is crossing the border to the US (probably not legally) but in the spirit of the film it is overlooked as he is so young. Somehow he meets this Chihuahua who escapes from the ladies car and follows Pablo around.
The reason the dog follows Pablo is because Pablo plays an instrument on a pan pipe I think. Every time Pablo would play this one tune the dog would then stand on it's hind legs and dance to the tune. The Chihuahua would spin around (pirouette) etc.
They encounter various situations with the dog being the center of attention whilst traveling in the hot desert sun through cactus plants(cacti).
He does try and cross the border through the border guard station using various methods which probably would be something of a talking point on the O'reilly factor today.
The movie is a good film and I would like to buy it if they release it on DVD.