Earlier this week, Allan Scott of Google posted a blog post on the Google Webmaster Blog named 5 common mistakes with rel=canonical.
This is really a must read for any developer, webmaster or site owner with a larger site.
In short, the top five canonical mistakes are:
(1) rel=canonical to the first page of a paginated series
(2) Absolute URLs mistakenly written as relative URLs
(3) Unintended or multiple declarations of rel=canonical
(4) Category or landing page specifies rel=canonical to a featured article
(5) rel=canonical in the body>
I recommend you read the full blog post, which has illustrations to explain all of it.