The straight tail dogs.

As the dog ages and develops more musculature, especially in the hind end, the tail should come up a bit higher. It appears to be a decent tailset.

Mostly wagging tail doesn't mean a friendly, happy dog. Dogs use their tails to relay information to people and to other dogs, and generally do not wag their tails when they are alone.  Some experts believe that the wagging tail helps to transmit their scent to other dogs.  To decipher why a dog is wagging his tail, you will need to be aware of other social cues.

If a dog is in the presence of other dogs, a wagging tail held high may actually be a sign of dominance or even aggression.  A wagging tail, along with barking or growling can be a warning to stay back.

However, a tail held straight out and wagging broadly generally indicates excitement and/or happiness.  This type of tail wag is commonly seen when a dog is greeting his owner.