Is this possible, or is there some code that can be added so I can set a different canonical URL for categories in Magento? I can set for products fine.
Just found this question while searching for info about canonical URL support.
I'm not sure which version added this (couldn't find anything in release notes), but it is now supported out of the box in 1.7.0.2.
In admin: SYSTEM >> CONFIG >> CATALOG >> SEARCH ENGINE OPTIMIZATION
Last two options enable canonical URLs for categories and products.