If you take an internal filter, increase its filter media compartment, make it watertight and connect it to your tank using two water tubes(water in+water out), you have a canister filter. While caninister filter is a relatively newer type of filter, like all filters it has it's advantages and disadvantages and is not necessary the best.
One advantage of the caninister filter is that it increases the total water volume of your aquarium system. This is a always a good thing, because a bigger water volume means a lower concentration of harmful byproducts of fish food and waste (such as dossolved organic compounds). Also, a bigger water volume means the water is more stable with less fluctuations in temperature and water parameters. Another advantage is that since it is situated out of the tank, your fish has more swimming space and also your tank looks 'cleaner' with less equipment in it. If the water outlet is connected to a rainbar, it will also aerate the water as well.
The disadvantage of caninisters is the hassle of doing regular maintainance. As a result, many users of caninisters do not maintain them as regularly as they should. This causes uneaten food and waste to collect on the mechnical filter (wool). Without washing or replacing, these debries decay and break down on the wool. the result is that the waste is just decaying in a different place. Instead of decaying in your tank, it decays in your filter. The impact on the system is a higher bioload because these wastes break down into extra ammonia, nitrites and nitrates when they should be removed from the system even before they break down. As you can see, caninister are better used for biological filtration. This makes it very suitable for a type of aquarium that produces little solid waste and uneaten food, the natural aquarium (aka planted aquarium/planted tank).
Note: There has also been cases of leaks causing a minor flood on the floor of the home of some aquarists so if you do get a canister filter, go for a good one so you don't have to worry about it when you go on vacations.