How can I convert canvas content to an image?

You can either generate a postscript document (to feed into some other tool: ImageMagick, Ghostscript, etc):

from Tkinter import *
root = Tk()
cv = Canvas(root)
cv.create_rectangle(10,10,50,50)
cv.pack()
root.mainloop()

cv.update()
cv.postscript(file="file_name.ps", colormode="color")

root.mainloop()

or draw the same image in parallel on PIL and on Tkinter’s canvas (see: Saving a Tkinter Canvas Drawing (Python)). For example (inspired by the same article):

from Tkinter import *
import Image, ImageDraw

width = 400
height = 300
center = height//2
white = (255, 255, 255)
green = (0,128,0)

root = Tk()

# Tkinter create a canvas to draw on
cv = Canvas(root, width=width, height=height, bg='white')
cv.pack()

# PIL create an empty image and draw object to draw on
# memory only, not visible
image1 = Image.new("RGB", (width, height), white)
draw = ImageDraw.Draw(image1)

# do the Tkinter canvas drawings (visible)
cv.create_line([0, center, width, center], fill="green")

# do the PIL image/draw (in memory) drawings
draw.line([0, center, width, center], green)

# PIL image can be saved as .png .jpg .gif or .bmp file (among others)
filename = "my_drawing.jpg"
image1.save(filename)

root.mainloop()