Basic animation steps

1. Clear the canvas
   Unless the shapes you'll be drawing fill the complete canvas (for instance a backdrop image), you need to clear any shapes that have been drawn previously. The easiest way to do this is using the clearRect() method.
2. Save the canvas state
   If you're changing any setting (such as styles, transformations, etc) which affect the canvas state and you want to make sure the original state is used each time a frame is drawn, you need to save that original state.
3. Draw animated shapes
   The step where you do the actual frame rendering.
4. Restore the canvas state
   If you've saved the state, restore it before drawing a new frame.

Controlling an animation

Scheduled updates

setInterval(function, delay)

Starts repeatedly executing the function specified by function every delay milliseconds.

setTimeout(function, delay)

Executes the function specified by function in delay milliseconds.

Updating on user interaction

var myAnimation = new MiniDaemon(null, animateShape, 500, Infinity);

var myAnimation = new Daemon(null, animateShape, 500, Infinity);

An animated solar system

var sun = new Image();
var moon = new Image();
var earth = new Image();
function init(){
  sun.src = 'http://sandeeplikhar.blogspot.in/Canvas_sun.png';
  moon.src = 'http://sandeeplikhar.blogspot.in/Canvas_moon.png';
  earth.src = 'http://sandeeplikhar.blogspot.in/Canvas_earth.png';
  setInterval(draw,100);
}

function draw() {
  var ctx = document.getElementById('canvas').getContext('2d');

  ctx.globalCompositeOperation = 'destination-over';
  ctx.clearRect(0,0,300,300); // clear canvas

  ctx.fillStyle = 'rgba(0,0,0,0.4)';
  ctx.strokeStyle = 'rgba(0,153,255,0.4)';
  ctx.save();
  ctx.translate(150,150);

  // Earth
  var time = new Date();
  ctx.rotate( ((2*Math.PI)/60)*time.getSeconds() + ((2*Math.PI)/60000)*time.getMilliseconds() );
  ctx.translate(105,0);
  ctx.fillRect(0,-12,50,24); // Shadow
  ctx.drawImage(earth,-12,-12);

  // Moon
  ctx.save();
  ctx.rotate( ((2*Math.PI)/6)*time.getSeconds() + ((2*Math.PI)/6000)*time.getMilliseconds() );
  ctx.translate(0,28.5);
  ctx.drawImage(moon,-3.5,-3.5);
  ctx.restore();

  ctx.restore();
  
  ctx.beginPath();
  ctx.arc(150,150,105,0,Math.PI*2,false); // Earth orbit
  ctx.stroke();
 
  ctx.drawImage(sun,0,0,300,300);
}

Screenshot	Live sample

An animated clock

function init(){
  clock();
  setInterval(clock,1000);
}

function clock(){
  var now = new Date();
  var ctx = document.getElementById('canvas').getContext('2d');
  ctx.save();
  ctx.clearRect(0,0,150,150);
  ctx.translate(75,75);
  ctx.scale(0.4,0.4);
  ctx.rotate(-Math.PI/2);
  ctx.strokeStyle = "black";
  ctx.fillStyle = "white";
  ctx.lineWidth = 8;
  ctx.lineCap = "round";

  // Hour marks
  ctx.save();
  for (var i=0;i<12;i++){
    ctx.beginPath();
    ctx.rotate(Math.PI/6);
    ctx.moveTo(100,0);
    ctx.lineTo(120,0);
    ctx.stroke();
  }
  ctx.restore();

  // Minute marks
  ctx.save();
  ctx.lineWidth = 5;
  for (i=0;i<60;i++){
    if (i%5!=0) {
      ctx.beginPath();
      ctx.moveTo(117,0);
      ctx.lineTo(120,0);
      ctx.stroke();
    }
    ctx.rotate(Math.PI/30);
  }
  ctx.restore();
  
  var sec = now.getSeconds();
  var min = now.getMinutes();
  var hr  = now.getHours();
  hr = hr>=12 ? hr-12 : hr;

  ctx.fillStyle = "black";

  // write Hours
  ctx.save();
  ctx.rotate( hr*(Math.PI/6) + (Math.PI/360)*min + (Math.PI/21600)*sec )
  ctx.lineWidth = 14;
  ctx.beginPath();
  ctx.moveTo(-20,0);
  ctx.lineTo(80,0);
  ctx.stroke();
  ctx.restore();

  // write Minutes
  ctx.save();
  ctx.rotate( (Math.PI/30)*min + (Math.PI/1800)*sec )
  ctx.lineWidth = 10;
  ctx.beginPath();
  ctx.moveTo(-28,0);
  ctx.lineTo(112,0);
  ctx.stroke();
  ctx.restore();
  
  // Write seconds
  ctx.save();
  ctx.rotate(sec * Math.PI/30);
  ctx.strokeStyle = "#D40000";
  ctx.fillStyle = "#D40000";
  ctx.lineWidth = 6;
  ctx.beginPath();
  ctx.moveTo(-30,0);
  ctx.lineTo(83,0);
  ctx.stroke();
  ctx.beginPath();
  ctx.arc(0,0,10,0,Math.PI*2,true);
  ctx.fill();
  ctx.beginPath();
  ctx.arc(95,0,10,0,Math.PI*2,true);
  ctx.stroke();
  ctx.fillStyle = "rgba(0,0,0,0)";
  ctx.arc(0,0,3,0,Math.PI*2,true);
  ctx.fill();
  ctx.restore();

  ctx.beginPath();
  ctx.lineWidth = 14;
  ctx.strokeStyle = '#325FA2';
  ctx.arc(0,0,142,0,Math.PI*2,true);
  ctx.stroke();

  ctx.restore();
}

Screenshot	Live sample

A looping panorama

var img = new Image();

// User Variables - customize these to change the image being scrolled, its
// direction, and the speed.

img.src = 'http://commons.wikimedia.org/wiki/File:Capitan_Meadows,_Yosemite_National_Park.jpg';
var CanvasXSize = 800;
var CanvasYSize = 200;
var speed = 30; //lower is faster
var scale = 1.05;
var y = -4.5; //vertical offset

// Main program

var dx = 0.75;
var imgW;
var imgH;
var x = 0;
var clearX;
var clearY;
var ctx;

img.onload = function() {
    imgW = img.width*scale;
    imgH = img.height*scale;
    if (imgW > CanvasXSize) { x = CanvasXSize-imgW; } // image larger than canvas
    if (imgW > CanvasXSize) { clearX = imgW; } // image larger than canvas
    else { clearX = CanvasXSize; }
    if (imgH > CanvasYSize) { clearY = imgH; } // image larger than canvas
    else { clearY = CanvasYSize; }
    //Get Canvas Element
    ctx = document.getElementById('canvas').getContext('2d');
    //Set Refresh Rate
    return setInterval(draw, speed);
}

function draw() {
    //Clear Canvas
    ctx.clearRect(0,0,clearX,clearY);
    //If image is <= Canvas Size
    if (imgW <= CanvasXSize) {
        //reset, start from beginning
        if (x > (CanvasXSize)) { x = 0; }
        //draw aditional image
        if (x > (CanvasXSize-imgW)) { ctx.drawImage(img,x-CanvasXSize+1,y,imgW,imgH); }
    }
    //If image is > Canvas Size
    else {
        //reset, start from beginning
        if (x > (CanvasXSize)) { x = CanvasXSize-imgW; }
        //draw aditional image
        if (x > (CanvasXSize-imgW)) { ctx.drawImage(img,x-imgW+1,y,imgW,imgH); }
    }
    //draw image
    ctx.drawImage(img,x,y,imgW,imgH);
    //amount to move
    x += dx;
}

<canvas id="canvas" width="800" height="200"></canvas>