The hydrodynamic equations for a gas of hard spheres with dissipative dynamics are derived from the Boltzmann equation. The heat and momentum fluxes are calculated to Navier-Stokes order and the transport coefficients are determined as explicit functions of the coefficient of restitution. The dispersion relations for the corresponding linearized equations are obtained and the stability of this linear description is discussed. This requires consideration of the linear Burnett contributions to the energy balance equation from the energy sink term. Finally, it is shown how these results can be imbedded in simpler kinetic model equations with the potential for analysis of more complex states. @S1063-651X~98!15709-4#