The canvas objects hotspot isn't adjustable and it doesn't update when the object is scaled.
If it's scaled down to 50% of it's size it will rotate around a hotspot that would exist if it were still 100%.
I know there is a way around this.
example: http://dl.dropbox.com/u/1727838/rotate.cap
The linked cap is also a simple example on how to create movable scalable rotatable dynamic display boxes.
I'm going to use this on a 45" table with a rear projection (like the Microsoft surface table)
Sense the players can be on either side of the table this will allow them to move their personal boxes to a comfortable viewing position.