http://www.yorkietalk.com/forums/yor...ully-soon.html   Canine Hip Dysplasia | Hip Dysplasia in Dogs  
While the articles posted did not go into detail about what can go wrong within the hip joint - there are two most common problems with true hip dysplasia.   First hd is not truly an arthritic problem - but is a structural short-coming with-in the hip joint that eventually or sometimes quickly lead to arthritic changes (dependent upon the severity of the disease).    
The hip joint is known as a ball and socket joint - it can be easily visualized if you cup one hand make a fist with the other and place your fist into your cupped hand. Your fist is the ball joint and the socket is your cupped hand.  Hip joints are meant to fit very snugly together and with HD they don't.   Sometimes the cup is too shallow for the size of the ball - sometimes to deep - sometimes the rim of the cup is un-even or oddly shaped.  Sometimes the ball joint is mal-formed - either too small or too large or ovoid in shape.    
But you really want an expert to examine the joint to take the right radiographs for ddx'ing specific hip conditions.   And to advise on either medical management - ie non surgical options and or surgery.   
Then further to the exercises - management alluded to in the article.  Here are some other options again everything to be discussed with your specialist  
1. Acupuncture can be very effective for pain management - Get a vet who is certified in canine acupuncture.   
2. Chiropractor treatment for the spine.  Again it is very important to get a canine chiropractor practioner - and to also have good and usable diagnostic Xrays.    
3. Swimming is grand as is underwater treadmill work.   
4.  There are various supplements you dog could go on - some of greater efficacy than others.  Glucosamine and chondroitin - Glycoflex - Dasuquin to name just a few.    
5. Canine physiotherapy is great as well - specific strength building exercises for the hindquarters.    
I wish you all the best for your pup