Canvas size is just that, the size of the canvas you 'paint' on. You can paint a very small picture on a huge canvas, but you'll end up with a lot of white background. The scale image is how to size the actual image itself. So imagine a small canvas on an easel. If you scale the image to big, you run out of canvas and the image will get cut off on the edges of the canvas. If the canvas is too big, you get a small image with a lot of white background.
Personally, I try to keep the image size and the canvas size relatively the same.