The canonical URL informs websites that the current URL is the authoritative location for the content contained on this page. This is useful if you're sharing content across multiple domains, have content available via feeds on other sites, etc.
With Nodewords (6.x-1.14-beta1 and above) it will automatically assign the canonical URL tag for the current pages using the page alias, so search engines will index e.g. /products/flying-monkey rather than /node/42. Also, with the 1.14-beta1 release I've made a concerted effort to make it "just work" out of the box, so you should get reasonably useful meta tags just by enabling the modules.
Also, if your content is available via multiple domains you can hardcode which domain the content is available from, that way even if the content loads on all of the old URLs the search engines will present the canonical one as the preferred page.
Disclaimer: I am the maintainer of the Nodewords module.