First of all, let me clarify this is not my dog. Thank God.
I'm going to be studying dog training soon, but this case has been thrust upon me coincidentally.
An old friend has an ACD that is evidently a menace. She's kills anything that moves. Large, small, furry or scaly.
People have been telling her to put the dog down, and I'm wondering if she can be salvaged.
How would I go about training the dog out of this behaviour, and training the owner while I'm at it.
What training methods?

A good dog behaviorist could probably help, but an ordinary dog trainer would be hard put to fix an American Cattle Dog that has already decided to kill prey. Good luck, as a dog trainer I wouldn't touch this with a ten foot pole.

I know its not your dog, but for ease of writing this I'm going to pretend it is. pets question and answers,www.5d2d.com
First of all in order to stop the killing behaviour when the owner is not around I would pen the dog. This, of course, is only an inter-rum measure but will reduce the number of bodies you'll need to bury!

Next you'll need to reinforce all aspects of basic training and pack dominance. If the basic training and group dynamics are not where they should be, nothing will work at all. This can take a good several weeks, and often the simple act of reintroducing the basic training can help to reaffirm the pack dynamics.

After that you need to understand a few things about the breed that should have been understood when you first got the dog. Cattle dogs- no matter what kind- need to work. They don't necessarily have to herd cattle, butt hey need a job in the pack that is theirs and that they are expected to perform daily. It can be as simple as keeping the birds off the vegies by barking at them, or guarding, or fetching the newspaper... doesn't matter what it is, they need a job or they find one for themselves. In this case your dog has found itself the job of guarding the territory against other creatures, and it achieves this by killing them. This will be the hardest part of the training. You will need to introduce the dog to a new 'job', and train it to do that job. pets question and answers,www.5d2d.com
Since the dog will be penned when you are not with it, you will be on hand to prevent the dog killing any animals. Whenever the dog goes to kill an animal, you need to stop it with a command, and redirect it to perform the 'job' that you have assigned it.

This is a long process, possibly years, and you will need to maintain vigilance at all times around smaller animals that may tempt the dog to attack. Most people find it easier to just put the animal down. If you have young children near the dog, it may become a necessity. However, it is possible to salvage the dog- if you have the time to invest in it. Most people don't.