Thank You all for your help - here is an update. At Dinner time last night, I fed Lucy (my dog) and afterwards I put the cat's food in their dish and as they were eating, I brought Lucy into the room with a few treats in hand. She immeadiately started to get aggressive when she saw the cats eating so I jerked the leash and put her into a "sit" position. As she continued to raise her lip in agression I found the only thing that would bring her out of it was a snap of the fingers in front of her face. Eventually (within less than a minute) she layed down and was rewarded with a treat. She then became totally submissve, lying on her back while having her belly rubbed and focusing her attention on me. We were about 2 feet away from cats and dish. This morning I fed Lucy and then brought her to where the cats were eating and she just went to a "down" position and appeared to care less that the cats were eating. Unfortunately, the cats are "once bitten, twice shy" and leave their dishes when Lucy comes into the room. I will try the canned food though as my most timid cat (Jasper) goes wild for it.
I definately think we are on the right path!