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Please let us know if it bounced back after the next Panda! I'm guessing it will.

I'm not a big fan of doubling-up on canonicalization tactics, because there's no good way to tell what's working. The 301 is probably a tiny bit stronger (not much, in my experience), but the advantage of the canonical tag on the home-page is that one tag will sweep up any variants. If you 301 "index.html" to the root, and then someone comes along and uses the non-www version of your home-page or adds a tracking parameter ("index.html?track=1234"), etc., the 301 won't do anything - you'll have to create 301s for each situation. The canonical will prevent those problems, which are very common on home pages.

Hi Gareth Thanks for that, I did think that is all it would take, but just wasnt sure if their was anything else I could have done to help remove all these pages from the index. The website has under-gone quite a big change in last few weeks with many of its pages being removed, so hopefully google will soon update its index.

Great questions.  I am sure many of us are watching how the Panda update is changing linking. Here is the answer everybody hates (including me at times)  I think the big change in 2011, and 2012 in SEO has to be in building better content on sites, and building better social signals to sites. And for most of us that's a real change in course. Adding calculators, tips, Forums, FAQ, and funny stuff along with Quality promotion for links. We still use Directories and Articles, but only when we we do it because it makes promotional sense, not just SEO.