My app has a viewStack, each Canvas inside the viewStack has an image.

I have set showEffect and hideEffect for each Canvas to fadeIn and fadeOut
(see code) and this works, but of course they fade in and out to the
background stage. How can I have the images dissolve into each other? If this
is not possible with a view stack (which would be ideal for many reasons in my
app), how would you recommend doing it?

<mx:Fade id="fadeIn" duration="500" alphaFrom="0" alphaTo="1"/>
<mx:Fade id="fadeOut" duration="500" alphaFrom="1" alphaTo="0"/>

The sequence is as follows right now:
CANVAS1 fade, CANVAS1 invisible, CANVAS2 visible, CANVAS2 fade

You need to have both CANVASes visible and fading at the same time.

Let another CANVAS contain the other two CANVASes and control their fading by
script. Detect when the transitions end using the effectEnd event or the
<mx:Fade> tag. In the event handler, set the ViewStack selected index.

This should work.

Actually, I found an even easier way:

http://www.efflex.org/

Outstanding SWC library and simple-to-manage code. I love the internet.