Our cousins in the primate world share the same base facial expressions as we do, happy, sad, disgust, etc; it would make sense that other mammals are capable of facially displaying emotional registers.
However, canines can't pass the mirror test for self awareness, but chimps can. However however, it is known that dogs' oxytocin level rises when they stare into our eyes (similar for female human into her baby's eyes). Thus, if the dog is experiencing elevated feel good neurotransmitters, then a smiling face would appear to make sense.
The question is, have you seen dogs smiling in abused situations?
My other thought on this is that the smile could just be a pavlovian manifestation: you become happy shen the dog smiles, so the dog smiles more--the dog has an association of you being happy to something good happening to it, so it wants to make you happy more.
Sorry I don't have a definite answer for you, but afaik the neuroscience / psychology of dogs keeps expanding in complexity, so I would say that yes, the dog is happy.