Hey, if your players want to put a +5 headband of intellect on the party dog, so be it. More power to 'em, I say.
Thing is, it's just a *really* smart dog (or whatever) at that point. Intelligence points aren't retroactive like Con is. So, whereas an increase in Con automatically recalculates hit points for every level, an increase in Int doesn't automatically add Skill points. So, a Dog with a 5 Int still wouldn't be able to speak (no vocal ability to do so, anyway), and even if it *could* speak, it doesn't speak the language since animals don't start with any language skills.
So, if the players did that in *my* game, the dog (or whatever, again) would look at them with contempt, and then run the heck away, taking their headband with it. It doesn't automatically make them their friend, either. The dog might decide that it no longer wishes to be enslaved as their pet, and is going to seek its fortunes elsewhere.
Or, it might wait until the party is asleep, steal some of their rations, and then leave under the cover of darkness.
In either case, it'd be a good way to teach the players a valuable lesson: don't give animals expensive magic items.