Cannoscale also exists in modelspace, and when I talk about it that's where I concentrate on its use. In paperspace I think in terms of viewport scale, which is accessed through the same scale list on the taskbar in paperspace AND in modelspace.
This came to be in 2008. The first thing it does is allow you to view linetypes in modelspace without necessarily having to scale them way up (and then use a global scaling setting so they scale way back down in a viewport). I do a lot of stuff in 1/4" or 1/8" scale, and set my cannoscale in modelspace to that. I can set all of those other variables to 1 and Lo and Behold, I can see my linetypes perfectly in modelspace AND in every paperspace viewport. Currently I am doing some things in 1/6" scale and even in 1"=30'-0" scale and I still can see the linetype, because I change the cannoscale in modelspace as necessary. It looks like it adjusts the scaling of the linetype in modelspace, and yet magically everything else remains set to 1 and still works in paperspace.
It doesn't end there though. If for example, you have created an annotation object such as a light switch (I advise to create all things in paperspace first, at the size that looks good to you when plotted), and you are in modelspace with your Cannoscale set to 3/16" = 1'-0", that object will insert already adjusted to the size you would see it at if you were in paperspace looking through a 3/16" scale viewport.
I used to not have a clue about Cannoscale in modelspace and so it was the default of 1:1 scale, so if I brought in that light switch it would be extremely tiny because it would be showing at the 1:1 scale. AutoCAD does have a warning box asking if this is the scale you want to insert stuff in, but somewhere along the line it stopped showing up on mine -- probably when I got wise to setting my Cannoscale!