The SEO Engine™'s Duplicate Content Analysis enables users to find any Webpages on the Internet which share content with a given Webpage. The SEO Engine™ will detect the Link Flow® of the other Webpages so you can see if the Search Engines consider your copy to be the original or a copy. This helps detect multiple copies on the same Website, or on duplicate Domains. Often multiple Domains will share Link Flow® to the same content, and the Duplicate Content Indicator will facilitate the consolidation of this scattered Link Flow®. Search Engines will typically filter out any Webpage which is not the original copy for the given words and phrases which it has copied.
Exact Duplicate content means most likely that there are multiple URLs referencing the same file on your Web Server. A common example of this is when you have http://www.mysite.com/index.htm and http://www.mysite.com/ resolving to the same Webpage. A 301 Redirect to the correct URL version is appropriate here. The SEO Engine™ penalizes this and is shown on the Webpage Scorecard. While Search Engines (including the SEO Engine™) typically can distinguish this condition, it is not good because of the split Link Flow® that can occur.
Matched Duplicates (see on the Duplicate Content tab of the Webpage Scoresheet and Website Dashboard) are typically a symptom of not enough information on 2 or more Webpages which share similar content structure (like ads, or a navigation bar). The solution to this is to create more unique content that is geared towards the Market Focus™ that your Webpage is about. The SEO Engine™ penalizes this heavily, as do other Search Engines, because this is a more insidious condition - it often represents an attempt to simply create more useless Webpage content for a Search Engine in the hopes of creating more "Landing Pages".
The SEO Engine™ supports the recently added 'canonical' tag that many Search Engines now incorporate into their Search Engine Result Pages. Google presents a very detailed explanation about canonical here.
Because the SEO Engine™ is used to visualize the Webpage and Link Architecture within a Website, the rel='canonical' Tag does NOT alter the architecture. It is merely used as a "hint" to the SEO Engine™. When you specify the tag, you essentially tell the SEO Engine™ that the duplicate penalties below are to be removed: