Aww... poor little chi-wee

Did the vet not say anything as far as removing the cataracts? Is it something that can be controlled with medication before the cataracts get worse? I hope he didn't just give you such a doomed sounding prediction without giving you some treatment alternatives... I would ask your vet more about it - like if the retina is actually damaged to the point that removing the cataracts would be futile...
My aunt had a poodle with cataracts in both eyes and he lived a happy, full life - dogs have a great sense of hearing and smell, they can still carry on living active lives.
I found this article on cataracts.. maybe it will help...
http://www.peteducation.com/article....&articleid=407