Below from http://hoaxbusters.ciac.org/HBReal.shtml#theobromine
Theobromine - Cocoa Mulch Warning May 2003
 
This one is essentially true.  Theobromine is a chemical in cocoa that is
much like the caffine in coffee.  Dogs don't metabolize it quickly so it
is lethal to them in quantities of about 100 to 150 Milligrams per pound
of body weight.  For Milk Chocolate, which contains 44 to 60 mg/oz this
works out to about 33 to 68 ounces of Milk Chocolate for a 20 pound dog.
Other kinds of chocolate contain different amounts of Theobromine.  A
good article on Theobromine is on about.com.
 
Cocoa Mulch is made by Hershey's from the shells of the cocao beans.
According to the Hershey's website,
 
It is true that studies have shown that 50% of the dogs that eat Cocoa
Mulch can suffer physical harm to a variety of degrees (depending on each
individual dog).  However, 98% of all dogs won't eat it.  What this means
is that if you are going to use Cocoa Mulch in your garden, you chould
check to see if your dog will eat it before spreading it around.
 
Cocoa Mulch, which is sold by Home Depot, Foreman's Garden Supply and
other Garden supply stores, contains a potentially lethal ingredient
called "Theobromine".
 
It is lethal to dogs and cats.  It smells like chocolate and it really
attracts dogs.  They will ingest this stuff and die.  Several deaths
already occurred in the last 2-3 weeks.  Just a word of caution -- check
what you are using in your gardens and be aware of what your gardeners
are using in your gardens.
 
Theobromine is the ingredient that is used to make all chocolate --
especially dark or baker's chocolate -- which is toxic to dogs.
 
Cocoa bean shells contain potentially toxic quantities of theobromine,
a xanthine compound similar in effects to caffeine and theophylline.  A
dog that ingested a lethal quantity of garden mulch made from cacao bean
shells developed severe convulsions and died 17 hours later.  Analysis
of the stomach contents and the ingested cacao bean shells revealed the
presence of lethal amounts of theobromine.
 
[Moderator's note: This agrees with my comment at the end the original
post -- it can cause problems.  Even the Hershey company states it!  What
I object to is the blanket statement that "several dogs have died in the
last 2-3 weeks" and that it's harmful to cats.  The warning has been
around for years -- and every time it says dogs have died in the last
2-3 weeks.  How do we know that?  And cats?  No, I don't think so.
 
I agreed to the original post because although it was off-topic many of
us have dogs and might not be aware of the danger.  The topic is closed
unless someone can convince me this is somehow ferret related.  BIG]
[Posted in FML issue 4169]