You've hit the nail, but only slightly on the head. Generalization goes even farther, and it's more complex with working on other animals than just "sit" location.
It will also involve: large dog, tiny dog, dog with three legs, dog with long tail, dog with no tail, dog with fluffy tail, dog with patched coat, dog with brindle coat, dog with one color coat, dog with no hair at all. Dogs with poofy hair, dogs with funny haircuts, dogs with accessories on, old dogs, young dogs, puppies, yappy dogs, growly dogs, dogs that ignore you altogether, dogs that lunge, dogs that stare, the list goes on.
It's quite hard for dogs, in the beginning, to make the connection between "see another dog" and "receive little treat" every time. It can be done though, and it is a great cue to teach, especially for certain dogs. Not only dogs who dislike other dogs, but for dogs who love other dogs and think it's the doG-given right to greet every dog on the street, dogs with focus issues, dogs that like to bark at other dogs to play, etc. I like to teach "see another dog, look to mom", as it's a clear cue to understand and it doesn't even require a verbal cue, it's just a routine that develops. Some helpful ways to teach this:
- It's easiest if you can set up training sessions with one or two strange dogs (maybe dogs of friends or a trainer?), and repeat several training sessions with those two so the dog learns the general behaviour first. Kind of like learning to sit in the house before learning to sit out of the house.
- If you can't do that, then see if you can find somebody who walks their dog around the same time every day that you do, and try to practice with that person's dog. You can even let them know what you are doing as sometimes having them aware can help the situation out, without them having to really be involved.
- Use a marker, like a clicker, a tongue click, something very specific to mark the second the dog looks at another dog. It's not necessary, but it can speed up the learning process by distinctly marking what is giving the dog a reward. You can use a word, but if you are a person like most who talks to their dog a lot, it might not be as effective as a novel sound.
And it is much faster than you simple fumbling to try to get the treat to your dog at the right moment. Perhaps one time you reward for looking at the dog, perhaps the next you are a bit early and reward for looking at the person beside the dog, and perhaps the next time you are late and reward for looking at the rose bush. Lack of consistency (which a marker can fix) causes a lot of teaching problems for dogs, and they can become confused as to what you are actually reinforcing!
- Use a special treat just for that behaviour you are working on. So if you practice other things on your walk that are rewarded as well, like sits, downs, loose leash walking, etc (which I assume you would be!!), or just marking good behaviour, then use a totally separate treat for the looking at other dogs. Perhaps you'll use kibble or cookies for well-known behaviours, but save the good stuff for the harder behaviours, like cheese or steak or liver. This way the dog will really associate the other dogs with super good stuff, and the super good stuff only happens when another dog is present. It can speed up learning.
- Don't overwhelm the dog in the beginning. Start by just rewarding for glancing from a distance....don't then immediately run up to that other dog to begin a play session or try to introduce them. It can impact your dog's learning curve. The goal here (I think) is to make your dog aware, and comfortable, of the presence of strange dogs and to make it a "ho-hum" ordeal so that your dog does not feel aroused, fearful, or that he/she can necessarily greet every dog it sees.
You might be interested, also, in ordering the book or DVD of Control Unleashed. The behaviours that you learn to teach are invaluable, and one of the ones you might benefit the most from is called Look at That Game (LAT).
Hope this helps!