When I want to prevent other event handlers from executing after a certain event is fired, I can use one of two techniques. I'll use jQuery in the examples, but this applies to plain-JS as well:

1. event.preventDefault()

$('a').click(function (e) {
    // custom handling here
    e.preventDefault();
});

2. return false

$('a').click(function () {
    // custom handling here
    return false;
});

Is there any significant difference between those two methods of stopping event propagation?

For me, return false; is simpler, shorter and probably less error prone than executing a method. With the method, you have to remember about correct casing, parenthesis, etc.

Also, I have to define the first parameter in callback to be able to call the method. Perhaps, there are some reasons why I should avoid doing it like this and use preventDefault instead? What's the better way?