Your task needs to implement ICancelableTask. It's a very simple interface added in 4.0.
Basically you just add a Cancel() method. It must be ready to be called on a different thread, at any time, and return promptly. Your task must then return from Execute promptly. Typically you'd set a boolean flag inside Cancel(). Then inside your task you'd typically have a loop processing each input in turn -- for example, copying one file after another -- and in each iteration, check the flag; if it's true, break out. It doesn't matter whether you return true or false from Execute in this context.
If you're deriving from ToolTask -- if your task spawns a tool, it's very strongly recommended that you do this, as it saves a great deal of code, handles async logging, and other things -- then it already handles Cancel automatically. When Cancel happens, it kills the tool it spawned and all its children. The C++ team's tasks in some cases override this default behavior, so that their compiler/linker has a few seconds to clean up their half-written outputs before returning.
(Trivia: when I first implemented this in MSBuild, I accidentally made VS bluescreen the box occasionally. This nearly shipped in VS10 beta but was discovered just in time. The bluescreen was because the logic for figuring out the process tree was wrong, and would sometimes kill a system process. Oops.)
Dan