Cow Hooked Back Legs

I think you mean cow HOCKED.  It deals with the fact the legs are not "straight".  Movement, speed and agility will require more effort and be less effective than a dog with better structure.  Essentially when viewing the dog from the rear while it is standing, the hocks (what looks like an elbow) will point or curve outward.  The opposite condition, that joint curving inward is sickle hocked.  

 Unless a working or performance dog, it is not likely to be problem if that is all that is wrong. 

 yeah, hocked, sorry, not my day for typing!

This is a friend's dog and we are talking competition, such as agility. Nothing else indicated wrong at this point.

 How old is the dog and what breed?  A puppy can go cow hocked and manage to straighten as they gain muscle, particularly if they have a lot of rear "angle" (turn of the stifle), if that's the case swimming and running the dog on sand will help (don't over work a puppy, but allowing to play and run in sand and swim will help build muscle).

 Does the dog move true when watching from behind, or do the hocks reach outside of the front legs?  Many dogs will stack hocky and then will move true... if that's the case, she's probably just a bit weak in the rear, again, build muscle.

If the dog is truly hocky, depending on the severity of it, it can be a problem, as MRV has said.  However, there are people who believe that a cow hocked dog provides more agility and power in the rear (for take off).  I don't know if that's necessarily true, or at what point it goes from power/agility to "too much" and becomes a liability. But, I've seen a huge amount of hocky dogs in agility and in the field and it certainly doesn't appear to slow them down :)

 2 year old German Shepherd

He is truly hocky, but enjoys the competition
Those dogs you mention did not develop further joint problems such as arthritis or ACL injuries?

I was going to bet money on this being a GSD.  Hard to find ones that ARENT cow hocked.  It's really not uncommon for their hocks to be 45 degrees.

 My female Weim is hocky, but moves true.  My terrier is very hocky, she does have luxating patella issues, but that's got more to do with the JRT genetics than that she's hocky.  So far they've both been fine. I do give a glucosamine/chondroitin/MSM combo daily at a fairly high dose (even to my male who is true in the rear) mostly because I run them a lot and do agility.... and I truly believe it helps.  

 Liesje said, it's hard to find a GSD who is true in the rear, I don't have a lot of experience with the breed, but having seen them at agility and conformation shows, I'd almost say it should be written in the breed standard! :)  (Just kidding)  I've noticed a lot of hocky border collies at agility, too.  And field bred Weims tend to be hocky, even without all that rear angle.  ((shrugs)) it happens.

 Thank you all for your input and advice!