If you're doing animation to be video, or that only has to play in an Android or iOS app, or that only has to play on a desktop browser, you should use an ActionScript 3.0 FLA, and then you can use Stream as the sync. Also, make sure to use WAV sounds and not MP3, that will give you much better scrubbing.
If you have to use HTML5 Canvas, which only makes sense if the animation has to be viewed in a mobile browser, then you can only choose Event as the sync, and you either have to write code to make the animation skip frames on slower devices, or you need to make your animation simpler so that it can keep up with the sound. Also, make sure to use MP3 and not WAV, because WAV sounds can sometimes be distorted when used inside an HTML5 FLA.
Thank you so much. I'm a complete newby. I just want to animate a lip-sync to an audio clip that I could upload to YouTube or share with friends. In that case, what 'canvas' and audio format should I use?
Use an ActionScript 3.0 FLA, use WAV sounds that are 16 bit, 44.1 KHz sample rate, either mono or stereo. In the timeline, set the sounds sync to be Stream. Animate away, and enjoy all the scrubbing you can do!
When you have your animation ready you can do File/Export/Export Video... and produce a file ready for YouTube. At that point you are likely to have new questions, start a new topic with just the questions you have then.
Don't use HTML5 Canvas for what you are doing.