I transfer to keep the paper clean because using an eraser a lot can ruin the surface of watercolour paper. I can't draw something just in one go so I need to do a 'roughraft' Transferring does take an AGE though.
If it's something that I am doing for a "serious" painting as opposed to a for-fun/learning/derping around painting, I always plan the line art on tracing paper first and then I transfer it to the canvas/board/whatever when I am done. That way I know my lines are where I want them to be and I won't wreck the surface of the canvas or board with eraser streaks. I want it to be done as clean as possible. On my most recent painting though I planned the line art out in Photoshop and thought it might be quicker to grid and transfer directly onto the canvas; bad idea. I thought it might be faster but it absolutely was not. /sigh.
I usually draw lots of preliminary sketches so at first i use any paper or notebook i have. When i have decided how should it look i just make sketch on canvas or panel with paint - dont trace or anything. I dont draw with graphite or charcoal on canvas cause i just dont like to see all those dirty pant-charcoal mixes that also have a chance to be visible after the work is finished. And I'm to lazy to varnish this charcoal sketch - actually this can be done to prevent it from mixing with paint. But actually i dont think its wrong to transfer your sketch on canvas in any other way - just pick one that your comfortable with. Also, i think it'd be easy to use some sort of PC program that enlarges your sketch and prints it on more than 1 sheet of paper so you just get a "poster" with your sketch which you can trace to your painting base...
When I do my artwork, I use sketch paper to sketch out the core of the character/environment/creature or what not, then I take my deleter paper and trace the core lineart with pencil, and then I ink it. I would advise not trying to ink straight from tracing. Your bound to make a bad line. Lol.