I would like to know why it's better to use observers rather than adding the action directly into the onclick="".
eg.
$('mybutton').observe('click', respondToClick);
vs
<a href="#" onclic="respondToClick()">button</a>
Thanks
This is a fairly common question so I'll refer you to a quality article on quirksmode.org that answers this question and other question you may have about event handling.
Here is an excerpt:
<a href="somewhere.html" onclick="alert('I\'ve been clicked!')">
It is very important to realize that this ancient way of event handling was de facto standardized by Netscape. All other browsers, including Explorer, had to conform to the way Netscape 2 and 3 handled events if they wanted JavaScript to work. Therefore these ancient events and event handlers work in all JavaScript browsers.
Have fun reading.