I highly endorse Cesar Millan's (A.K.A. "The Dod Whisperer" on the National Geographic Channel) method of dog training. Check out
Welcome to Cesar Millan's Official Web Site
He recommends a leadership approach towards dog training. There are no quick fixes. It is an ongoing technique that lasts the lifetime of your pet. However, the results are highly rewarding and satisfying.
As for your specific problem ... if Mrs. Sitterley's suggestion works for you, it could be a viable option. Dogs have tons of energy ... most of it is misguided and tends to get directed towards undesirable outlets. By providing an "approved" activity for your dog, it's a win - win situation.
On the other hand, if your goal is to completely prevent your dog from digging ... different measures should be taken. As Mrs. Sitterley said, dogs just simply want to please their owners. By training your dog to understand that you are "not pleased" with an undesireable action, they will slowly stop doing that behavior ... simply to please you. To put this into action ... until your dog is trained not to dig, you cannot allow him/her to be in the backyard unsupervised. This puts a large burden on your family ... but, dog training is a full-time commitment. When you see your dog begin to dig, immediately push him/her away from the spot. The goal is to establish leadership ... to train your dog to respect your wishes and accept your guidance. For some dogs, they will properly understand what is right or wrong the first time. For others (hyper dogs, puppies, etc.) this type of reinforcement will have to be repeated many times to develop the desired results. Do not give up !!! Stick to your plan ... dogs crave structure. Consistency and persistency are the mottos of a succesful dog training program. Good luck !