Martin Sheen had this as his Desert Island disc the other day. Like most other works by Pachelbel and other pre-1700 composers, the Canon remained forgotten for centuries and was rediscovered only in the 20th century. Several decades after it was first published in 1919, the piece became extremely popular, and today it is frequently played at weddings and included on classical music compilations, along with other famous Baroque pieces such as Air on the G String by Johann Sebastian Bach. It was originally scored for three violins and basso continuo and paired with a gigue in the same key. The circumstances of the piece's composition are wholly unknown. One writer hypothesized that the Canon may have been composed for Johann Christoph Bach's wedding, on 23 October 1694, which Pachelbel was at (Bach's mates and family all did the music for his wedding).
Pachelbel's Canon combines the techniques of canon and ground bass. Canon is a polyphonic device in which several voices play the same music, entering in sequence. In Pachelbel's piece, there are three voices engaged in canon (see Example 1), but there is also a fourth voice, the basso continuo, which plays an independent part. The bass voice keeps repeating the same two-bar line throughout the piece. The common musical term for this is ostinato, or ground bass. Beautiful piece of music, but perhaps a trifle dull if you play bass.
There is a huge number of variations and recordings.
Here it is on the original instruments [youtube=http://www.youtube.com/watch?v=JvNQLJ1_HQ0&w=700]
And another version... [youtube=http://www.youtube.com/watch?v=stCKjZniMsQ&w=700]