Html :: Switching From Flash To <canvas>

I've done a lot of Flash development and have been meaning to try out canvas for a while, but after browsing through some tutorials, I can't understand how this is supposed to replace Flash.

Note: I ask a lot of questions down here. I don't really expect them all to be answered. What I'm really looking for is some basic guidance about how I should be thinking while developing on <canvas>.

From the spec, it looks like <canvas> is really more analogous to the Graphics class in Flash, which one would use something like this:

class ColoredCircle extends Sprite {
private var _color:uint=0x0;
public function ColoredCircle(color:uint) {

[Code].....

Should I be treating <canvas> like a Sprite? Marking everything as position:relative should allow me to basically duplicate display list-type behavior (I don't believe that you can nest <canvas> elements, but you could probably do so by throwing in a bunch of <div>s). However, I use a lot of Sprites in my projects. That's going to be a metric crap-ton of tiny canvas elements. Also, how do you handle mouse events in <canvas>? Do they trigger if someone clicks on a transparent part of the canvas's box model (bad)? If I have a canvas with two circles in it and I need to know which one gets clicked on, do I have to do bounds-math with the mouse position?