Capturing action is a matter of choosing the right shutter speed. You have a lot of options from a sharp subject against a blurred background to a sharp background with a blurred subject, or both blurred, or a sharp subject and a sharp background.
For this photo, I wanted the dog to be mostly sharp with a little blurring of the legs. Based on past experience, I knew a shutter speed around 1/250 to 1/500 second would be about right. 1/320 second gave me the look that I wanted. I also wanted a little depth of field insurance so I picked an aperture of f/8. It was a cloudy day, so I set the ISO to 400 to give me the exposure I needed for the aperture and shutter speed combination I had in mind. Picking a higher ISO would have meant a smaller aperture (with too much depth of field) or a faster shutter speed (losing the blur in the dog’s legs). Choosing a slower ISO would have meant a wider aperture (and not enough depth of field) or a slower shutter speed (and the dog would be too blurred).
I had a Canon EF 70-200 f/4L IS lens on a Canon 7D camera body. I zoomed the lens as the dog ran by to give me the framing I wanted. The Canon 7D sensor has a 1.6x field of view crop so the 169 mm focal length was the equivalent of 270 mm on a full frame digital sensor or a 35mm film camera.
To get an action photo like this you will need an assistant. I wanted the dog to pass through the field of view, rather than running straight toward me, so I had my son throw a ball where I wanted the dog to run. I “panned” with the dog (just like a TV camera following the action) as he ran by which blurred the grass and the fence. If the camera had been stationary, the grass and fence would appear sharp and I would have had to use a much faster shutter speed to freeze the dog (and a much higher ISO setting to get the right exposure). Detailed information on how to do this (not to mention other ways of dealing with motion) is in my new photo book. See the link at the end of this post.
My camera drive is usually set to single shot mode (one photo each time I push the shutter button), but for this photo, the camera was set to high speed mode (8 frames per second for as long as I hold down the shutter) and I would usually shoot a 3 or 4 frame burst for about half a second. Even at a rate of 8 frames per second, that doesn’t guarantee you will capture the exact moment you want. Timing is still important. In the frame immediately before the above photo (taken just 1/8 second earlier), the dog’s legs were together underneath him instead of spread apart. The dog ran by a few times before I got exactly the photo I wanted. It helps if you have something the dog loves to chase.
A lot more information on controlling action and subject motion, along with detailed information on combining apertures, shutters speeds, and ISO settings, is in my new book, Digital Photography Exposure for Dummies.