I was able to witness first hand how smart a border collie can be. The past 2 years I watched a border collie grow from a puppy to an adult. He was able to understand almost everything we said. However, he would often choose not to listen.
Above is a picture of "Betsy" a border collie from Vienna, Austria as featured on the front page of this months National Geographic. In this National Geographic article you can read about how extraordinarily smart animals can be. For example Betsy was shown a photograph and given a name to associate with the picture and was able "to make a cognitive leap that the thing in the photograph is what you are trying to find." She will be able to find the object in another room among many other objects. Once she associates the name of the object she locks it away, similar to the way a toddler learns .
Here is a picture of Rain the border collie I was able to take care of the past couple years.