I have several brake pads on my cantilever brakes that have several small metal shavings embedded in the pad. Is this normal? What should I do about it?
This is normal to some extent - brake pads have to be made of soft material which wears down on the rims (and conversely, the rims wear down into the brake pads to some extent) in order to stop you. This means the pads pick up grime and bits of metal from the rims and road and stuff which embed into the pads and in turn wear down your rims / reduce braking efficiency. If they're eating large portions of metal, then you should probably switch the pads to ones made of different material (anecdotal evidence suggests the pads which come with most cheaper brakes belong in the trash).
I'd start with a high quality pad (e.g. Koolstop Salmon pads), and making sure the rims are clean (use citrus degreaser/rubbing alcohol). Mavic and some others make special blocks for cleaning and (slightly) sanding your rims as well, which you can use (but definitely not necessary).
If you do get metal or other contaminants in your pads though, you can pick it out with tweezers and buff the pads with some fine sandpaper (remove the grit afterwards!). Make sure the pads have sufficient material leftover after this - if the metal backing comes through, your rims are going to take damage.
Also, make sure your brakes are properly adjusted: http://sheldonbrown.com/canti-trad.html http://www.parktool.com/blog/repair-help/cantilever-brake-service is a good link to look at as well (Specifically see the "Pad Wear" section). If your brakes are rubbing on the brake tracks, you'll pick up more cruft (and wear out your rims), for example.
Also, check your rim wear indicators (if you have them - they're reasonably common on modern rims) to make sure that you're not too worn on the rims as well (this is typically a little groove which should be there on the rims, but can appear in other forms such as something that appears when the rim is too worn out). If you don't have them, you can try a procedure like http://archive.ctc.org.uk/resources/Magazine/20011163.pdf. If the rims get too worn, they break and you end up hurt (probably).
I have found that they are contaminated at manufacture, not collected as from road debris or the rim wearing away. I saw a chunk about a quarter of an inch long and 16th of an inch wide buried, actually held fast in the brake block and it gouged a groove in the rim of the front wheel in short order. There were many other pieces of shiny metal in the blocks and other blocks I had as spares.