Necessary disclaimer: Starting from version 1.2, nodewords module has full support for canonical URLs. I strongly encourage everyone to use nodewords module instead of standalone canonical_url.
After release of nodewords 6.x-1.2, canonical_url is considered deprecated module and will be shut down after reasonable period of time.
Canonical URL is new standard adopted by Google, Yahoo and MSN, that can help to avoid unwanted duplicated content problem.
Code is based on meta tags module, with lot of things removed.
Module operates in 2 modes: automatic and manual ('Automatic mode' checkbox in settings page).
In manual mode, canonical url is switched off by default, and is shown only for nodes with canonical url
explicitly set in node editing form ('Canonical URL' tab).
In automatic mode, canonical url is shown for all nodes. Default value is node path alias, which can be
overriden in node editing form, 'Canonical URL' tab.
More information about module and canonical urls can be found at http://www.valthebald.net/canonical-url-drupal.html
I'd be glad to get your feedback at http://www.valthebald.net/contact.html if you find this module useful.