Animals and Intelligence
Are animals just smaller humans? basically no, but humans are animals. this means that there must be some similarity between animals and humans, and there has been a long history of looking for this similarity.
Do animals think, well of course they do.
They have emotions as well.
The really big difference is in Intelligence. Research into the intelligence of animals has looked for the things that humans do that animals don't, and generally, they have found only small things that some animal or other can't do.
This is not the whole story, however, as when you start looking at the detail, there are a whole host of things that humans do in combination which animals can't do. so let us look at some details in the capabilities of humans and animals.
From language research, we get a few measures which tell us quite a bit about how language works in humans, and by applying the same measures to animals, it tells us some things about them as well.
First, you have the number of different symbols that are used by the group in communication. For your typical human language, you tend to have a range from the low twenties to the high forties (for spoken language) and when you move to written languages, you can get pictographic languages (like chinese or hyroglyphics) with a few thousand symbols. Contrast this with the typical range for animals, and they have a much smaller number of symbols that they can use for language, sometimes as low as eight.
Second, you have the number of ways in which these symbols can be used in combination with each other. Some animals use their eight symbols so that each symbol gives a specific message, and as you can imagine, these animals are not very intelligent. Other animals have more flexibility, and there is some reasons to believe (although the evidense is slight at the moment) that dolphins may be capable of the same sort of level of combinatorial complexity as humans.
For a long time, it was thought that only humans made and used tools. Then it was spotted that some primates were using tools, and later that even some birds can make and use tools. While not critical for intelligence, it does seem to be the case that the more dexterity your species has in being able to manipulate the environment, the better able you are to make and use tools, and this does have an influence on if you develope any type of technology. Neanderthals, while not human, had sufficient technology to behave in a similar manner to some of the very primative tribes of humans, but they were not inovative in their use of technology and got whiped out by humans.
Reactive vs Anticipatory Thought
This seems to be the area which makes the biggest difference between human and animal intelligence. Some birds when frightened continue reacting to their fright long after the fright has ended, so much so, that some of the birds in your garden can die of being attacked by a cat, even though no physical harm was caused. (humans still have this mechanism as well, it is connected to how hypnotism works). Rabbits are less harmed, so that while they will sit starring into the headlights while the car runs them down, if they are only stunned, they can get up and run off.
We know from neurology, that the reactive types of thought originate in the thalamus and hypothalamus, while being able to exercise fine descrimination of reactions (like pilots reacting in an emergency) takes place in the cortex. In fact, there is an entire science (or some would say pseudoscience) built on the premis of getting these two parts (and other parts) of the brain to work together. This science is called General Semantics, and is probably worth looking at.
As you might guess, as you go up the hierarchy of the animal kingdom, the amount of cortex increases, and both the quality of memory and the ability to descriminate between them also gets better. When you get to the primates, to dolphins, and to humans, this amount of cortex starts to be a significant fraction of both the brain, and the body, and this correlates well with the increases in sybolic complexity of the languages of the various creatures.
Language and Time
Only when the linguistic complexity is enough, and you can anticipate events well enough to have well thought out reactions, can you start to have a cultural history. This seems to happen in primates, to the extent that if certain types of primate are brought up in isolation from their own kind, they no longer speak the same language as the wild primates. It is at this point that you start finding stuff learned by the older generation being passed down to the young, so that they are not all having to rediscover everything that their peers know from scratch.
For further information on research about animal intelligence, these links seem to provide a good starting point (or at least, the best we have found so far).