Deneba has recently released a bug-fix Mac OS 8 compatible Canvas v. 5.0.3 Updater.
Update: Mea culpa. The following report is about the older Canvas 3.5.5 Updater, not the new Canvas 5.0.3 Updater (as was originally reported). Sorry for the confusion:
Reader Davide Guarisco writes: "I have had problems installing the 3.5.5 update. The Installer claims that the existing version of Canvas is "invalid" for upgrade. A Deneba employee confirmed that the upgrade only works for certain users. He told me to call Deneba and purchase a floppy disk upgrade."
Deneba Software adds; "This is a known issue with the Canvas 3.5.5 updater, but not with the 5.0.3 updater. The resolution is correct, however- those users who updated to 3.5.4 via download should contact us to order diskettes. The updater will only recognize diskette-installed or diskette-updated versions of Canvas 3.5.4."