For the most part, I would choose to use rel=prev/next for pagination, including both pagination with dynamic urls and static URLs. There are some cases (as with this original thread question) where you should use canonical, but as a whole you should use rel=prev/next.
The best way to explain it is:
Rel Prev/Next:
Your site: Hi Google, I have all of these pages that very similar so I'm just letting you know that I only have duplicate content here for usability reasons and am in no way inferring that you should index all of these pages and rank them #1!
Google: Ok great, thanks for letting us know. We'll index the pages we feel are appropriate, but you wont get penalized for duplicate content. We may only index and serve one page, "page 1", or we may index multiple pages. Thanks for letting us know.
Canonical:
Your site: Hi Google, I have all these paginated pages that look like duplicate content, please do not include any of them in your index, and don't penalize me for duplicate content. For the record, the page you should index is Page 1 and no other pages.Any links that point to the paginated pages should be counted towards Page 1*.
Google: Great, no matter what we will not index any pagination and only Page 1.
With rel=next you are simply letting Google know, but not dictating how Google should act on the situation. If fact with ecomm sites, youll find that a lot of timees when you use rel=next, Google will actually index the 'view all' page if you have "view all" as an option around your pagination links
*many articles suggest that link juice is passed to the canonical URL - I'm have not seen any direct evidence of this but is worth a different discussion.