In the original production and tour (which I saw), Toto was a real little white dog.
You only saw him run across the stage at the very beginning of the show, and then again at the very end, when Dorothy holds the last note of "Home," clicks her heels together, and he comes running out. She picks him up and hugs him as the lights go out. It was a very effective and emotional ending to the show.
Toto didn't go to Oz with her, though.
Here's a video of the '80s Broadway revival with Stephanie Mills singing "Home." You'll see her little white dog Toto at the very end.
http://www.youtube.com/watch?v=iD0MgoFDGGI
"Jaws is the Citizen Kane of movies."
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