Introducing a new puppy to a household of jealous pets?

[babygurlz]

I have a 8 year old Cairn Terrier and a 2 yr old cat who was the baby of the litter and since we've had her she is VERY clingy and VERY jealous...even of the attention we give to the dog. Now the Patches (the dog) and Peaches (the cat) didnt get along at first but now they do. However, my neighbor's two Yorkie's are expecting a new litter soon..to my neighbor's surprise...and they arent planning on keeping the puppies so they offered us one or more for free. We offered to take one of them..but I want to know how to handle bringing the puppy in when it is born. I believe our dog will adjust...but its the cat I worry about. She is VERY jealous because she is treated like the baby princess..and she is not declawed so I am scared she will hurt the puppy. Mind you she is very small but she still can fight. How should I go about introducing the puppy?
BTW I put it in the cat section because its the cat I need to work around the most..but I guess it is a dog question as well.