Alastair has a good post up about Holy War in the Old Testament. A sampling:
This is a point that the biblical text continually underlines: the Canaanites were not innocent and mild-mannered nations minding their own business, but brutal and bloody oppressors of other peoples, nations who perverted and defiled the image of God through all forms of sexual immorality and unfaithfulness, nations steeped in injustice and involved in the enslaving and subjugation of others, worshippers of cruel gods who demanded child sacrifice. This is the rationale that the Bible gives for the complete eradication of their culture. The Canaanites were perceived in a manner that made them the Nazis of their day, a society so evil and depraved that it had to be completely uprooted, and no form of compromise made with it. No tears were to be shed over the death of anyone who fought to defend that culture and the wickedness that it represented and perpetrated.