What's the effect of adding 'return false' to a click event listener?

The return value of an event handler determines whether or not the default browser behaviour should take place as well. In the case of clicking on links, this would be following the link, but the difference is most noticeable in form submit handlers, where you can cancel a form submission if the user has made a mistake entering the information.

I don't believe there is a W3C specification for this. All the ancient JavaScript interfaces like this have been given the nickname "DOM 0", and are mostly unspecified. You may have some luck reading old Netscape 2 documentation.

The modern way of achieving this effect is to call event.preventDefault(), and this is specified in the DOM 2 Events specification.

You can see the difference with the following example:

<a href="http://www.google.co.uk/" onclick="return (confirm('Follow this link?'))">Google</a>

Clicking "Okay" returns true, and the link is followed. Clicking "Cancel" returns false and doesn't follow the link. If javascript is disabled the link is followed normally.

Here's a more robust routine to cancel default behavior and event bubbling in all browsers:

// Prevents event bubble up or any usage after this is called.
eventCancel = function (e)
{
    if (!e)
        if (window.event) e = window.event;
        else return;
    if (e.cancelBubble != null) e.cancelBubble = true;
    if (e.stopPropagation) e.stopPropagation();
    if (e.preventDefault) e.preventDefault();
    if (window.event) e.returnValue = false;
    if (e.cancel != null) e.cancel = true;
}

An example of how this would be used in an event handler:

// Handles the click event for each tab
Tabstrip.tabstripLinkElement_click = function (evt, context) 
{
    // Find the tabStrip element (we know it's the parent element of this link)
    var tabstripElement = this.parentNode;
    Tabstrip.showTabByLink(tabstripElement, this);
    return eventCancel(evt);
}