My fiance and I allow our dog to sleep with us. He's on the smaller size, around 20 lbs. Once in awhile he'll be a bed hog but if he's taking up too much space I usually just pick him up and move him. Luckily normally he snuggles right up next to me and doesn't take up much bed space. It comforts me to have him next to me at night.
I'm not worried about the health hazards because I keep my dog healthy and clean. Most of the hazards that I've heard people talk about come from not keeping your dog clean, well groomed, and healthy.