Preventing/solving duplicate content: canonical link/URL vs 301 redirect

Index

What is duplicate content?
   What is a canonical URL?
   What is a 301 redirect?
Duplicate content scenario I - www versus non-www
   Solutions for "www versus non-www" scenario
Duplicate content scenario II - index.php for home
   Solutions for "index.php for home" scenario
Duplicate content scenario III - dynamic pages
   Solutions for "dynamic pages" scenario
Duplicate content scenario IV - uncontrolled extended URLs
   Solution for "uncontrolled extended URLs" scenario
Conclusions

What is duplicate content?

Duplicate content is content (usually text) that is identical to the content of other web pages. These web pages may or may not be on different domains. However, this article is about duplicate content that is accidentally created on one and the same domain.
Regarding duplicate content, Google webmaster central mentions that " . . . the ranking of the site may suffer, or the site might be removed entirely from the Google index, in which case it will no longer appear in search results."
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What is a canonical URL?

In search engine lingo, the canonical URL (Uniform Resource Locator aka website address) of a website page is the preferred location of that page. Using the relatively new link element rel="canonical", the Google, Yahoo and Microsoft search engines may be informed as to what the preferred location of a page actually is.