Duplicate content is seen as a negative in the eyes and algorithms of the search engines as they like to see unique, compelling content that can adequately address a searchers keyword query. Duplicate content comes in the form of duplicate pages, like multiple URLs for the exact same homepage, or the same paragraph of text that shows up on multiple URLs. One goal of any SEO program is to decrease duplicate content and increase unique, compelling content for the search engines to crawl, index and display.

We often see two or more versions of the homepage living on a server and available to the search crawlers. Commonly we see www.yoursite.com AND www.yoursite.com/index.html or www.yoursite.com/default.html. While there may be valid reasons for having both of these pages live (such as the CMS used or underlying page technology), these exact duplicate pages will tend to split the authority of the homepage in the eyes of the engines.

While using a 301 re-direct to go from www.yoursite.com/index.html to www.yoursite.com is the preferred method, using a Canonical URL Tag can be an answer to this situation if indeed you need to have both duplicate pages live to the world. Here's how the Canonical URL Tag is built and how it works:

The tag is placed in the header section (where the <title> tag and meta descriptions live) of the page you want to "hide" from the search engines. Normally this is the /index.html or /default.html version of the homepage.

The tag structure looks like this: <link rel="canonical" href="http://www.yoursite.com" />

Some situations in which using the canonical URL tag makes sense include:

• Multiple versions of the homepage
• Your category URL system creates multiple versions of the same page
• You have a print version of the exact same content which creates multiple versions of the same page
• You use session IDs in your URL (which you shouldn't!) that creates thousands of versions of the same  page

Google has a further explanation of the Canonical and how to use it here and is worth the read:

http://googlewebmastercentral.blogspot.com/2009/02/specify-your-can...

I hope this helps!