The freezing issues are associated with people who still haven't figured out that most PS3 freeze issues are due to autosaves created prior to the most recent update (hint: the solution is to simply exit the game and delete your autosave. once the game creates a new one under the new update, it shouldn't freeze any longer).
As far as the dog: HE'S SUPPOSED TO DISAPPEAR. He's essentially a spell that wears off.
DAII plays awesome on PS3.