This patch is intended to reduce reliance on the Event.* methods. It patches Event.observe so that in IE, by default, "this" references in an event handler point to the object on which the handler was assigned, instead of the "window" object. (Note that you can still re-adjust this scope through "bindAsEventListener.")
It also aims to normalize the event parameter passed to the handler by creating the DOM event model equivalents of IE's event model properties. For instance, "e.target" grabs its value from "e.srcElement," "e.which" from "e.button," etc.. The stopPropagation and preventDefault methods are copied over too. (There's probably more that can be normalized; I'll check QuirksMode to be sure.)
The Event code has been modified as little as possible. It doesn't break compatibility with any existing scripts.