Remember that it is a priority seating - not a reservation. The system is designed for no-shows! They do not hold a table for you the way a regular restaurant would. They put you at the front of the line when you do show up.
They deliberately made the system this way because they totally understand that you could be on line for Space Mountain when your time comes up, or you could have ended up in a different park for the day, or your kids could be waiting to get Mickey's autograph, or your kids could be over tired an you are on your way back to your room....you get the idea. They expect this to happen. And they don't expect you to get right to a phone when you are on line for a ride or to see a character.
Short notice or no notice is acceptable. The table doesn't go empty. It just means a walk in might get seated faster or even someone with a ps might get a seat right away instead of waiting 5 - 10 minutes! It really is a great system.
That said, if you know in the morning that you are skipping dinner that night or you know at home after you've made all your PS that you made a few too many character meals and need to cancel one, etc., of course it is courteous to cancel. It allows someone else who calls for a PS to get one.
But last minute cancellations are not a problem at Disney World....so relax and enjoy! (Like others pointed out, it's different for any meals that require a credit card. Be sure to cancel those at 24 - 48 hours in advance - whatever the specific policy is for the event).
Hope that helps.