Since you're already using jQuery, change the line
canvas.onmousedown = function(e) {
addBullet("black", 10, 2, playerList[0].x, playerList[0].y, e.x, e.y);
}
to
$(canvas).mousedown(function (e) {
addBullet("black", 10, 2, playerList[0].x, playerList[0].y, e.clientX, e.clientY);
});
and consider moving all these inputs into a param object.
Also: never define your program inside an 'if', instead cancel 'if not'!
Working version: http://jsfiddle.net/LyUmZ/4/
EDIT: if jsfiddle does not work you may have run into into your browsers/noscripts xss guard, use xss->unsafe reload (in firefox noscript) and it should work.